The Cyprus Economy and Competitiveness Council (Ecompet) outlined medium-term and long-term proposals to tackle inflation via innovation investment.
The Council said that due to the seriousness of inflation, it established a committee to propose measures and policy directives to tackle inflation.
“Inflation is one of the most significant challenges facing all EU member-states, including Cyprus,” the Council said.
“Inflation has multiple adverse aspects, such as weakening purchasing power, increasing interest rates and slowing economic growth.”
The Council proposes improving productivity through digital transformation and innovation, recalling that the government’s Recovery Plan includes an array of measures to invest in innovation and boost productivity.
Digitisation, the Council added, will reduce the need for transportation to address services physically and the imposition of additional fees.
Improving broadband connection will enable a more innovative environment that would reduce operating costs and improve household costs via work-from-home solutions.
On improving supply chains and boosting Cyprus connectivity, Ecompet proposed that the Ministry of Commerce’s Trade Service should be strengthened to promote exports, the digitisation of services and utilise new technologies in agriculture.
It said upgrading ports and airports with new technologies and their promotion as regional hubs would improve supply chains and reduce transport costs.
Furthermore, the Council highlighted cheaper energy sources, a circular economy and energy efficiency.
It said that upgrading the electricity market, interconnections with other countries and using cheaper energy sources will gradually reduce electricity bills.
According to the Council, promoting a circular economy will reduce the excessive consumption trends and use of raw materials resulting in reduced production costs and an overall reduced final cost for consumers.
“The state should also upgrade energy efficiency for buildings, promote affordable housing and other measures to support vulnerable households.”
Ecompet recommended the promotion of cheap and efficient mass transportation, recalling that “Vision 2035” suggests a change in culture over public transportation.
To this end, the Council suggested increasing the frequency of bus routes for universities and schools and providing economic incentives to certain groups, such as university students and pupils, to use public transport.
The Council said using trams in Nicosia and Limassol and trains connecting cities could be viable in the future “when crucial parameters change”.
