There is very close coordination on the country’s energy planning to reduce the price of electricity as soon as possible, Government Spokesperson Konstantinos Letymbiotis has said.

He was speaking on 1 October, following the military parade for the Independence Day of the Republic of Cyprus in Nicosia.

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Asked about developments in the energy sector following the meetings of President Nikos Christodoulides in New York, Letymbiotis said that significant steps have been taken in the three main pillars of the Republic of Cyprus’ energy plans, namely the arrival of natural gas, the electricity interconnections and the acceleration of Renewable Energy Sources penetration.

He further explained that important meetings were held in New York with the Greek Prime Minister and the French President regarding the electrical interconnection project, as well as with the United Arab Emirates state-owned company TAQA, which has expressed interest in participating in the Great Sea Interconnector project, and with Chevron regarding the Aphrodite project.

“We are in very close coordination because we understand and appreciate the importance of energy planning for every Cypriot household and its implementation as soon as possible to reduce the price of electricity in our country,” Letymbiotis said.

He also indicated that the decisions taken in the previous period should be activated and implemented as soon as possible.

Cyprus is grappling with an unrelenting wave of inflation that continues to squeeze household budgets and challenge businesses. The latest data from the Cyprus Statistical Service reveals a 19.2% overall rise in prices, with food prices showing an even more alarming increase of 25.7%. This spike in food costs underscores the severity of the economic pressures impacting consumers and companies alike.

The root causes of this inflationary surge are multifaceted. Global factors, including the lingering effects of the pandemic, disruptions in supply chains, and the geopolitical crisis in Ukraine, have contributed significantly to the escalating prices. Energy costs, transportation challenges, and rising production expenses have compounded the situation, leaving Cypriot consumers facing the steepest increase in food prices seen in years.

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Inflation’s ripple effects are felt most acutely in essential commodities. Basic food items such as bread, dairy products, and vegetables have become notably more expensive, straining the budgets of lower- and middle-income households. Many families have resorted to adjusting their spending habits, cutting back on non-essentials, and seeking lower-priced alternatives in an effort to cope with the price hikes.

From a business perspective, rising costs have created a challenging environment. Retailers and food producers are grappling with the delicate balance of managing increased overheads while trying to avoid passing too much of the burden onto consumers. As prices surge, businesses are faced with a potential decline in consumer spending, leading to lower profit margins and a potential shift in the competitive landscape. For some companies, these conditions could prompt innovation, particularly in finding more efficient methods of production or sourcing materials, but the road ahead remains uncertain.

The Cypriot government has taken some measures to mitigate the impact, including fuel subsidies and tax relief efforts, but these have so far proven insufficient in stemming the tide of rising costs. Calls for more robust interventions, such as targeted subsidies for essential goods or a reduction in VAT rates on food items, have gained traction in public discourse. However, with inflation largely driven by external global forces, the government’s ability to control the situation remains limited.

As inflationary pressures persist, both businesses and consumers will need to navigate an evolving economic landscape. For Cyprus, addressing these challenges may involve a combination of government action, industry innovation, and a recalibration of consumer behaviour. Ultimately, the capacity of both businesses and households to adapt will be key to weathering this period of heightened economic uncertainty.

Foreign but also Cypriot investors have shown interest in the port of Larnaca, Minister of Transport, Communications and Works Alexis Vafeadis said on Friday, urging Cypriots to enter the bidding process for the port.

In statements after a meeting he held with the Mayor of Larnaca and the Ad Hoc Committee, the Minister referred to the development of the port and marina of Larnaca, saying that the project must take such a form that it will serve the next generations.

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The Minister was asked whether, given the situation in the Middle East, it is easy to find an investor for the port. 

He replied that in the last three months, the phone calls he has received and the reports from many people in the private sector,  “encourage us that we will find an investor”.

He added that Qatar is just one investor that has expressed interest.

There are, he continued, others who have expressed interest.

The Minister noted that there are also Cypriots who are interested adding that “we want, if they can enter the bidding process, that Cypriots take it”.

The tourist sector’s positive performance in the last two years is not a reason for complacency, Kostas Koumis Deputy Minister for Tourism said, addressing an event hosted by the Deputy Ministry to mark the World Tourist Day, that was held in Eleftheria Square, Nicosia, on Friday.

“We need to redefine the role of tourism for the economy, entrepreneurship, the environment and the society,” he said.

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According to Koumis, the most significant challenge which acts as an existing threat to society as a whole, the economy and tourism is climate change.

“And for this reason, the Deputy Ministry has incorporated a special chapter on green transition in the updated National Strategy for Tourism,” he added.

Referring to the performance of the sector this year, Koumis said that data show that in the period from January to August, arrivals increased by 4.1%, compared to the respective period last year, while they marginally increased compared with the same period of 2019, which was Cyprus’ historic record year in terms of tourist arrivals. Furthermore, he added that revenue from tourism in the first six months of the year were up by 4.2% year on year, despite the fact that 2024 is marked by many adversities.

However, Koumis pointed out that the course of tourism is not secure, as a series of challenges, with the greatest stemming from climate change, call for the need to take immediate measures.

“Each destination’s competitiveness is directly attached to the implementation of sustained and environmentally responsible policies, and this is a one-way street if we want our country’s tourist sector to be competitive,” the Deputy Ministry said.

Rating Agency Capital Intelligence Ratings (CI) has upgraded Cyprus’ Long-Term Foreign Currency Rating (LT FCR) and Short-Term FCR (ST FCR) to ‘BBB’ and ‘A2’, respectively, from ‘BBB-’ and ‘A3’, maintaining a positive outlook.

The Limassol-based regional rating agency cites the continued improvement in the island’s public finances, persistent budget surpluses and rapid decline of public debt.

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“The upgrade reflects the continued improvement in the public finances, including persistent budget surpluses and a rapid decline in general government debt, with the debt to GDP ratio projected to drop below 60% in 2026,” CI ratings said.

According to the agency, the government continues to manage its debt maturity profile in order to reduce refinancing risks while maintaining an increasing cash buffer to counter short-term shocks and external adversities.

“The upgrade takes into consideration the significant decline in macro-financial imbalances, with the size of the banking sector declining to around 200% of GDP, and the cumulative debt overhang in the non-financial corporate and household sectors halving in recent years,” CI added.

The agency also highlighted “the demonstrated resilience of the Cypriot economy against increasing geopolitical risk factors, as well as the significant progress made in strengthening bank balance sheets by clearing up non-performing loans (NPLs) and reducing reliance on wholesale and cross-border funding.”

“As a result, government contingent liabilities from the banking sector have declined markedly in recent years,” CI said.

Furthermore, CI views that the targets outlined in the government’s medium-term debt strategy for 2024-26 are attainable and continue to ensure debt sustainability.

According to the agency, the general government budget performance remained very strong in the first seven months of 2024, with the budget position (on a cash basis) posting a higher than projected overall surplus of 2.2% of GDP (compared to 1.2% in 2023).

“As a result, CI expects the general government budget position to post a surplus of 2.9% of GDP in 2024, despite the adjustment of public sector wages,” the agency said.

Noting that short-term refinancing risks continue to decline, CI said that this is due to the government’s sound fiscal management, favourable debt maturity structure, and low gross financing needs (3.7% of GDP in 2024), as well as the prudent building of cash buffers of almost 10% of GDP that cover over 200% of gross financing needs for at least the next 12 months.”

In a sobering revelation, nearly 14% of the population in Cyprus is living in households at risk of poverty in 2023, according to the latest report from the Statistical Service of Cyprus. The findings indicate a persistent challenge for the nation, where a significant proportion of citizens face financial hardship, with household income levels falling below the poverty threshold.

The poverty risk threshold is defined as 60% of the national median disposable household income, adjusted for household size. For 2023, this equates to an annual income of €10,011 for a single adult and €21,024 for a household comprising two adults and two children under 14. The report highlights that a considerable number of Cypriot households are struggling to meet these income benchmarks, exacerbating concerns about economic inequality and social welfare in the country.

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The Complexity of Poverty in Cyprus

The situation is more nuanced than simple income statistics suggest. A range of factors, including the cost of living, inflation, and access to social services, play crucial roles in determining the risk of poverty. With the rise in inflation seen across Europe, Cyprus has experienced higher living costs, particularly in housing, food, and energy. These increases have further strained household budgets, particularly for low- and middle-income families, many of whom already teeter on the edge of financial insecurity.

Although the Cypriot economy has shown resilience in recent years, driven by sectors such as tourism and real estate, the benefits of economic growth have not been evenly distributed. Many households remain vulnerable, with limited financial reserves and increasing debts. Furthermore, long-standing issues such as unemployment and underemployment, especially among young people and women, contribute to the ongoing risk of poverty.

Government Initiatives and the Path Forward

The Cypriot government has implemented several measures aimed at alleviating poverty and promoting social inclusion. These include targeted welfare programmes, subsidies for low-income families, and initiatives aimed at improving employment prospects through education and vocational training. However, despite these efforts, the persistence of poverty suggests that more comprehensive approaches may be required to address structural economic inequalities.

Addressing the root causes of poverty will likely require multifaceted solutions, including further support for affordable housing, healthcare, and child services. Additionally, ensuring that wages keep pace with inflation and cost of living increases will be critical to improving financial stability for vulnerable populations.

Junior Achievement Cyprus (JA Cyprus), a prominent non-profit organisation that promotes entrepreneurship among young people, has announced the opening of applications for its flagship entrepreneurship programmes for the academic year 2024-2025. Aimed at fostering business acumen, innovation, and leadership skills among students, these initiatives offer invaluable hands-on experience in building and managing a business from the ground up.

The organisation’s two primary programmes—the “Company Programme” and the “StartUp Programme”—are designed to equip students with the skills necessary to thrive in the competitive global economy. Both initiatives aim to bridge the gap between theoretical learning and practical business application, encouraging students to think creatively and act decisively in real-world scenarios. The programmes are open to students from public and private secondary schools, as well as universities across Cyprus.

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Fostering Entrepreneurship from a Young Age

The “Company Programme” targets secondary school students, providing them with the opportunity to form a real company and develop their own products or services. This programme has gained international recognition, having been implemented across over 40 countries. Students are mentored by experienced business leaders and educators, who guide them through the complexities of entrepreneurship, from ideation to execution. Participants not only learn how to develop a business plan but also how to pitch their ideas to potential investors, handle financials, and navigate the competitive market.

The “StartUp Programme,” on the other hand, is tailored to university students and young professionals. This initiative allows participants to create their own startups, offering a platform to explore innovative solutions to real-world problems. Through this programme, aspiring entrepreneurs receive mentorship, access to business networks, and an opportunity to pitch their projects to investors at both local and international events.

The programmes culminate in local competitions, where teams present their business ideas to a panel of judges composed of industry professionals. Successful teams have the opportunity to compete at the European level, representing Cyprus in the Junior Achievement Europe Competitions. These events not only provide international exposure but also offer students the chance to expand their business networks, gain feedback from experts, and potentially secure funding for their ventures.

The President of the Republic Nikos Christodoulides and the Vice President of Chevron, the managing company of the field, Frank Cassulo, have reaffirmed their support for the development of the “Aphrodite” liquified natural gas field in Cyprus’ EEZ.

According to an announcement by the Presidency, in his statement, Government Spokesman Konstantinos Letymbiotis said that, during his time in New York, President Christodoulides met with a delegation of the US giant, led by the Vice President of the company.

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“The President of the Republic and the Vice President of the company reaffirmed their support for the ‘Aphrodite’ project, a project of strategic importance both for the energy planning of Cyprus, the wider region, but also for the company itself,” Letymbiotis said in his statement.

He also noted that “in the next period, with the road map that has been drawn up through a specific taking of actions and steps, the relevant Ministry of Energy and the Chevron company will proceed to be in close coordination and close cooperation for this strategically important project.”

The meeting with President Christodoulides took place after the joint statement of the Ministry of Energy and the US company, following their meetings in Nicosia, to hold discussions over the next four months “in order to seek a consensual arrangement that ensures the development of the ‘Aphrodite’ field without further delays,” as the Minister of Energy George Papanastasiou had stated.

The consortium that holds the license to develop the field had announced that it had filed an amended development and production plan for ‘Aphrodite’, worth $4 billion, with the Ministry of Energy on 2 September.

In a strategic move to strengthen its presence in the Australian financial market, eToro, a global trading and investment platform, has announced the acquisition of Australian broker Spaceship for AUD 80 million. The deal, which is subject to regulatory approval, marks another significant step in eToro’s ongoing expansion efforts, as it seeks to solidify its position in the competitive landscape of financial technology.

Spaceship, an Australian fintech firm that focuses on superannuation and investment products, has built a reputation for offering simple and accessible investment solutions to a younger demographic. Launched in 2016, the company has aimed to modernise Australia’s investment approach, particularly in the realm of superannuation. Its acquisition by eToro, which boasts a community of over 32 million users globally, reflects a growing trend of consolidation in the fintech sector as major players seek to diversify their portfolios and capture new customer segments.

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Strengthening eToro’s Footprint in Australia

For eToro, this acquisition is not just about geographical expansion but also about gaining access to new markets and tapping into the unique superannuation market, which is estimated to be worth over AUD 3.5 trillion. By acquiring Spaceship, eToro is positioning itself to offer a broader range of financial services in a country where the demand for self-directed investment options is rapidly increasing.

Yoni Assia, CEO of eToro, remarked on the acquisition as a move that underscores the company’s commitment to providing diverse financial products and services to meet the evolving needs of investors worldwide. “This acquisition is aligned with our vision to empower people to grow their knowledge and wealth,” Assia stated, indicating that Spaceship’s integration would enable eToro to offer enhanced investment tools and products tailored to Australian investors.

The acquisition of Spaceship also signals a broader trend of consolidation within the fintech sector, where established firms are acquiring smaller players to scale their operations and capture market share. For eToro, this acquisition comes on the heels of other strategic moves aimed at broadening its global footprint, including previous partnerships and acquisitions in Europe and the United States.

Liquidity in the Cyprus banking system (the difference between deposits and loans) rose to €28.7 billion in August 2024, driven by the rise in deposits in combination with the reduction in the outstanding balance of loans in the system, data released by the Central Bank of Cyprus (CBC) show.

According to the CBC, total deposits in August 2024 recorded a net increase (excluding the changes resulting from reclassifications, exchange rate and other adjustments) of €288.5 million, compared with a net increase of €164.7 million the month before.

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The annual growth rate of total deposits rose to 3.8%, compared with 2.9% in July 2024. The outstanding amount of total deposits reached €53.6 billion in August 2024, the CBC added.

The rise in deposits was driven by the increase in savings by Cyprus residents, which amounted to €194.2 million. Deposits of households and non-financial corporations increased by €34.6 million and €46.8 million respectively, whereas deposits of the remaining domestic sectors exhibited a total increase οf €112.8 million.

Loans down by €75 million

Total loans in August 2024 recorded a net decrease of €74.9 million, compared with a net decrease of €7.2 million in July 2024.

The annual growth rate (compared with August 2023) stood at 1.7%, compared with 2.0% in July 2024. The outstanding amount of total loans reached €24.9 billion in August 2024.

Loans to Cyprus residents exhibited a decrease of €72.2 million.

Loans to households and non-financial corporations decreased by €25.8 million and €53.6 million respectively. Loans to the remaining domestic sectors exhibited a total increase of €7.2 million, the CBC said.

The remaining domestic sectors include investment funds, other financial intermediaries, financial auxiliaries, captive financial institutions and money lenders, insurance corporations and pension funds and general government.