Nicosia: The message sent out by the European Commission’s spring forecast makes clear that the Cypriot economy is stable and resilient, Finance Minister Makis Keravnos said on Thursday, in statements on the sidelines of his participation in a meeting of the parliamentary Defence Committee.
According to Cyprus News Agency, the forecast sets out criteria for determining the economic situation of various member states and described as very important and significant the fact ‘that the European Commission has made it absolutely clear that the Cypriot economy is now in a state of stability and resilience, on a path of continuous growth, and has avoided any macroeconomic imbalance’.
The Minister highlighted this as a crucial development following years of uncertainty surrounding the resilience and macroeconomic performance of the Cypriot economy. Keravnos also mentioned the Commission’s preliminary assessment regarding the possibility of exceeding the spending ceiling, noting it as an initial evaluation with a final assessment expected in September, relevant to other countries experiencing growth that could lead to increased spending.
The issue has already been addressed in the EU Finance Ministers Council, particularly for countries that have announced significant spending increases. The Minister emphasized that the forecast indicates a continued reduction in Cyprus’s public debt, projected to fall below 60% this year. He noted that the economy is generating surpluses to fulfill financial obligations, implement social policy, and maintain stable growth.
Addressing concerns about inflexible spending, Keravnos acknowledged the government’s early recognition of the issue in its first budget, mentioning ongoing studies aimed at curtailing the growth rate of public sector wage costs based on a comprehensive IMF study. He further noted that the 2025 budget did not include new positions but rather fewer, with the wage bill being significantly lower than in the 2024 budget.