Nicosia: Minister of Labour and Social Insurance Marinos Moushouttas announced the Government's decision to increase the monthly minimum wage for full-time employment, after completing six months of continuous employment, from 1,000 to 1,088 euro. Speaking after the conclusion of the meeting of the Council of Ministers at the Presidential Palace, he stated that the Government, after assessing the overall macroeconomic and social data, decided to issue the amending decree on the Minimum Wage Limit of 2025.
According to Cyprus News Agency, the proposal for the adjustment of the National Minimum Wage took into account several economic factors. These include the level of inflation for 2024, projected at 1.8%, and the forecast for 2025, at 0.2%, cumulatively amounting to 2%. Additionally, the economy's growth rate for the same two years is expected to be 3.9% and 3.4%, respectively, which is significantly higher than the Eurozone average. Unemployment is expected to drop to 4.9% in 2024, with a forecast of 4.3% for 2025, considered a full employment level.
The decree also includes a provision that raises the monthly minimum wage before completing six months of continuous employment from 900 to 979 euro. This adjustment takes into account the projected slowdown in the growth rate for 2025 to avoid negatively impacting employment and development prospects, especially for small and medium-sized enterprises.
Low-wage workers are a focal point of targeted government policies, with the aim of protecting citizens from the risk of poverty and social exclusion. The increase in the minimum wage is expected to benefit around 50,000 workers. The Government also emphasizes its support for entrepreneurship and the strengthening of the country's development prospects, maintaining fiscal discipline and socio-economic responsibility.
The new wage adjustment will come into force with the publication of the decree, which is scheduled before January 1, 2026, and will be effective from January 1, 2026, until December 31, 2027. When asked if the new minimum wage includes the Cost of Living Allowance (COLA), the Minister confirmed that based on Government calculations, COLA is included at a rate of approximately 2%.