Cyprus Fiscal Council Urges Targeted Support Amid Inflation Risks

by THEFUTURE.TEAM

March 20, 2026

The Cyprus Fiscal Council warned of potential economic impact linked to recent developments involving Iran, citing risks to inflation, supply chains, and broader economic conditions. Council called for timely government action to address potential effects on the Cypriot economy.

Economic Pressures Mount As Geopolitical Uncertainty Grows

Recent developments related to Iran are increasing uncertainty in the economic outlook, according to the council. Officials said risks may affect multiple sectors through higher costs, supply disruptions, and shifts in external demand.

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High Uncertainty, Prolonged Conflict, And Broad-Based Inflation

According to the council, the continuation of hostilities, potentially evolving into an asymmetric war, introduces a high degree of uncertainty into the economic outlook. Officials stressed that the risks permeate every segment of the economy. Inflationary pressures are expected to extend beyond fuel costs, affecting commodities, intermediate goods, and fertilisers, while supply chain delays exacerbate the situation.

Strategic, Targeted Interventions Over Blanket Measures

Despite the potentially severe challenges, the Fiscal Council underscored that the government retains the capacity to respond effectively, buoyed by an improved fiscal position and strengthened liquidity reserves. However, rather than implementing blanket measures, the council recommended targeted support for low-income households and small to medium enterprises, which are most at risk. This focused approach is intended to safeguard employment and support sustained economic growth.

Clear Objectives And Sector-Specific Support

The council also emphasized that any intervention should be temporary and built upon clear, measurable objectives. By establishing pre-declared targets, it becomes possible to evaluate effectiveness and adjust strategies as needed. Furthermore, sector-specific support must be informed by individual industry conditions including liquidity levels, historical profitability, and banking sector exposure. For instance, sectors that experienced disproportionate price increases should be allowed to recalibrate without excessive state intervention.

Maintaining Fiscal Stability Amid Rising Pressures

Fiscal stability remains paramount amid expected revenue and expenditure challenges extending to 2028. The council’s advice is a reminder to policymakers that while targeted measures can mitigate immediate shocks, preserving economic resilience depends on maintaining a stable fiscal foundation over the long term.

Given the unpredictable trajectory of the conflict and its potential long-term impact, the council’s recommendations highlight the need for a nuanced and strategic policy response, aligning targeted support with clear fiscal prudence.

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Cyprus Livestock Industry Navigates Hemorrhagic Fever Impact

by THEFUTURE.TEAM

March 20, 2026

The recent outbreak of hemorrhagic fever has stirred concern among professionals in the livestock sector. Industry insiders report a modest 10% increase in lamb prices, while both production and export volumes of halloumi remain resilient.

Market Dynamics And Price Adjustments

Kostas Leivadotius, President of the Pan-Cypriot Meat Retailers Association, said supply has tightened following movement restrictions. Lamb prices increased from about €11 to €12 after detection of the virus, while pork and beef prices remain unchanged.

Production And Slaughter Statistics

Leivadotius said around 700,000 animals are slaughtered annually in Cyprus, including approximately 20,000 cattle, 450,000 pigs, and 200,000 lambs, with additional supply covered through imports. During last year’s Easter period, more than 50,000 lambs were processed.

Logistical Challenges And Regulatory Responses

Movement restrictions are affecting transport and processing of livestock. Leivadotius said slaughterhouse operations have been disrupted, prompting discussions with authorities on measures to improve transport and processing efficiency.

Regional Implications And Import Adjustments

Following reported cases on Lesvos, Cyprus suspended imports of meat from the area. Imports from Lesvos are typically limited, but alternative supply sources are now being considered.

Maintaining Production Amid Health Concerns

Emphasizing the need for decisive action, Leivadotius urged industry stakeholders and the wider public to heed expert guidance on disease containment. He underlined that accelerated vaccination efforts and stringent movement controls are essential to curb the spread of the virus, thereby allowing production levels to return to normal.

Stability In Halloumi Exports

Michalis Koullouros, representative of the Cyprus Cheese Producers Association, said halloumi exports and prices remain stable, with producers continuing to meet domestic and international demand. Around 80% of Cyprus’ milk production is used for halloumi, with exports accounting for €350 million of a €400 million market. He added that significant livestock losses could affect production levels if the situation worsens.

Future Considerations And Industry Priorities

Looking ahead, industry experts remain watchful of the potential reevaluation of the Protected Designation of Origin (PDO) timeline for halloumi. Although discussions on revising the current schedule have not yet taken center stage, the primary focus now is on containing the outbreak and reinforcing support for livestock producers. This strategy is essential for restoring production and ensuring the industry’s long-term viability.

In summary, while the outbreak of hemorrhagic fever has led to some immediate market adjustments, decisive regulatory action and industry resilience may well steer Cyprus’ livestock and dairy sectors back on track in the near future.