Τhe government is concerned about the risks to the economy, which may arise from price increases, said Cyprus’ Finance Minister Constantinos Petrides, noting, however, that inflation rise is currently considered as temporary.
The Minister pointed out the need for prudent policies, in order to “have the opportunity to intervene where we can and where we should”, noting however that there’re are no easy solutions.
In statements after receiving the annual report of Cyprus Economy and Competitiveness Council and asked if he was concerned about the effects of price increases on the economy, he said that “of course we are concerned” highlighting the effects of inflation. However, he noted that inflation has not yet reached past levels and was still considered as temporary.
The Minister also said that there might be other consequences that are not discussed at the moment, such as the need to increase interest rates to curb inflation and the impact that this will have on the market or on public debt, while Cyprus, he added, still has a high public debt.
“In order to prevent these risks, we need to have a policy that leads to the reduction of public debt because we don’t know how things will be tomorrow,” he said, adding that the economy is evolving, changing day by day and “we should not take anything for granted”.
Asked on the European Commission’s suggestions to help governments address record energy prices, the Cypriot Minister said that Cyprus has already subsidized electricity through national electricity company (EAC) for four months starting next November and already did that during the COVID crisis last year.
The Minister also referred to green growth and green taxation promoted by the EU, noting that this will lead to increase in fuel prices with all that entails.
“The green transition is not easy, it will also have cost for the consumers, and that is why European planning must be as careful as possible,” he said.
Asked about the expected increase in food prices due to animal feed cost, Petrides said that after the pandemic there’ s a different period of economic growth. Inflation, as he said and the current trends is something that worries not only in Cyprus but also internationally.
He added that the issue was being discussed at EU level and Cyprus was actively participating. He added that in the short term, they will look at the issue of breeders support and market conditions with the Ministry of Agriculture, however, as he said, inflation is a global trend and one cannot control it on a national level.
Receiving the annual report of Cyprus Economy and Competitiveness Council the Minister said that Cyprus has future as long as there’s strategic planning, which currently exists.
He added that in cooperation with Cyprus Economy and Competitiveness Council the budget was formed based on a vision and was related to EU’s Recovery and Resilience Facility