Economic rationalism should not be ignored for populist spending by a new government but maintain a serious fiscal administration and continuity, outgoing Finance Minister Constantinos Petrides warned.
“The public service in Cyprus, with the Finance Ministry at its frontline, constitute the backbone providing the conditions of 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.
On February 5, Cypriots go to the polls to elect the country’s next President.
Petrides said the government has effectively faced three crises, including the 2013 financial meltdown, with the economy recovering with 6.6% GDP growth in 2020.
He also cited low unemployment, which stands at 6.7%, fiscal stability, and the projected public debt to fall below 90% of GDP.
“In Q3, 2022, Cyprus recorded the highest GDP growth in the euro area, long-term unemployment from 6.1% in 2013 dropped to 2.7% in 2018 and 2.35% in the first nine months of last year.
“Despite headwinds and the three consecutive crises, indices on inequality and poverty in Cyprus continue to improve.”
The government went from a budget deficit of 5.7% of GDP in 2012 to a budget surplus of 3.5% in 2018, while the surplus is projected to reach 1.2%.
Petrides underscored the prudent fiscal and social support in times of crisis and the significant reduction in Cyprus’ borrowing costs which enabled a swift national support programme during the Covid-19 pandemic.
He said the country returned to invest-grade status reducing its borrowing costs and improving social cohesion and growth.
“For the first time, Cyprus has drafted a holistic plan to overhaul its growth model, Vision 2035.”