Recovery plan will add 7% to Cyprus GDP

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Cyprus’ recovery and resilience plan to make the economy socially and environmentally sustainable will increase GDP growth by 7% over the five-year implementation, said Finance Ministry official George Pantelis.

At the online discussion “Europe Recovery Plan, an Economy at the Service of the People”, organised by Oxygono and Europe Direct Larnaca, Pantelis said reforms and investments are estimated to increase productivity in the medium term.

Concerning GDP, it is estimated that from 10.6% today, the productivity contribution will increase to 23.5%, while employment will rise from 13.2% to 29.3%.

It’s expected that formal adoption of the Cyprus plan by the European Commission will mobilise public resources of €1.23 bln, some €230 mln concerns financing through the issuance of loans, while the first disbursement will be made within the third quarter.

“The Cypriot authorities, responding to the call of the European Commission, have prepared the national Recovery and Resilience plan to mitigate the economic and social impact of the pandemic but also to make European economies and societies more sustainable and resilient,” said Pantelis.

Most of the expenditures will be made between 2022-2025, with the highest expenditure from 2004.

The EU will monitor the project via six-month progress reports evaluated based on milestones and targets.

The main pillars of the Plan are the transition to the green economy and the digital transformation, mobilising of public and private funds.

Senior Financial Adviser of the European Commission Delegation to Cyprus, Christos Paschalides, said the EU Recovery and Resilience Mechanism is the EU’s response to an extraordinary health crisis.

It is a fund that introduces mechanisms to help the Member States emerge from the pandemic stronger and more resilient, preparing them for the new era.

Referring to Next Generation EU, Paschalides said according to assessments; effective implementation could increase Europe’s GDP by two percentage points per year and create 2 million jobs.

“The economic impact of the plan for Cyprus is expected to be very substantial, both in terms of economic activity and employment.”

He said every available amount for the Plan has a multiplier effect on the economy and prosperity.