Persianis: No Concern for Measures Due to Declining Debt

There is no concern about taking fiscal measures, as Cyprus's public debt is on a downward trend and is expected to fall below 60% of GDP with the announcement of the official 2025 figures, stated Michalis Persianis, Chairman of the Fiscal Council of Cyprus.

Speaking at a round table discussion, he estimated that the downward trend in debt will continue in 2026 and possibly 2027. Despite expected overruns in net primary spending, the debt dynamic does not create cause for concern, according to Mr. Persianis.

The state's liquid assets remain close to 10% of GDP, mainly due to revenues from KEDIPES, offering additional fiscal management options. Inflation is moving close to zero in 2025 (around 0.2%) and is expected to be slightly above 2% in 2026.

However, he warned that economic growth is based on a limited number of sectors, creating increased vulnerability. He stressed that social spending is expected to increase, while there are significant funding needs in infrastructure.

Marios Polemidiotis from the Central Bank of Cyprus stated that the Cypriot economy maintains strong growth and resilience, with low unemployment and inflation close to 2% in the medium term. Economist Ioannis Tirkidis pointed out that the public and banking sectors show strong liquidity.

CNA