Economic rationalism should not be ignored for the sake of other considerations, FinMin says

Economic rationalism should not be ignored for the sake of other considerations thereby maintaining a serious fiscal administration and continuity, Finance Minister Constantinos Petrides said on Tuesday.

“The public service in Cyprus with the Finance Ministry at is frontline, constitute the backbone providing the conditions of a serious administration and a serious continuity, provided economic rationalism will not be ignored for the sake of other considerations,” Petrides told a press conference to take stock of the Ministry’s work during his term in office.

On February 5 Cypriot will go to the polls to elect the country’s next President.

The government delivers a healthy and robust economy, Petrides said recalling that the government has effectively faced three crises including the 2013 financial crisis with the economy recovering with an projected 6.6% growth rate in 2020. He also cited the low unemployment which currently stands at 6.7%, the fiscal stability as well as the public debt projected to fall below 90% of GDP.

The outgoing Minister noted that in Q3 2022 Cyprus recorded the highest GDP growth in the euro area, adding that long-term unemployment from 6.1% in 2013 has dropped to 2.7% in 2018 and to 2.35 in the first nine months of this year.

Moreover, Petrides referred to an upward trend in new jobs since 2013 resulting from the solid economic activity and reflecting the Cypriot economy’s momentum and its prospects for further growth.

With regard to social indices, Petrides said that despite head winds and the three consecutive crises indices on inequality and poverty in Cyprus continue to improve.

He also recalled the government has from the budget deficit of 5.7% of GDP in 2012 was converted to a budget surplus of 3.5% of GDP in 2018 while the surplus is projected to reach 1.2% of GDP.

Petrides underscored the prudent fiscal social support in times of crisis, the significant reduction in Cyprus’ borrowing costs which enabled a swift national support programme during the Covid-19 pandemic.

In his remarks, Petrides spoke of robust public finances without resorting to tax hikes or reducing state expenditure, adding that social welfare expenditure have marked an increase of 71% reaching €1.8 billion while the country returned to invest-grade status reducing its borrowing costs and improving social cohesion and growth.

On the future, Petrides recalled that for the first time Cyprus has drafted a holistic plan to overhaul its growth model called “Vision 2035.”

Source: Cyprus News Agency