In a recent visit to Cyprus, Deemah AlYahya, Secretary-General of the Digital Cooperation Organization (DCO), expressed strong optimism about Cyprus’ potential in the digital economy. Her meetings with key government figures, including President Nikos Christodoulides, underscored the island nation’s commitment to harnessing digital transformation for economic growth.

The DCO, an intergovernmental body with 16 member states, aims to accelerate digital economies through cooperation. Cyprus’ membership as the first European country highlights its forward-thinking approach. AlYahya emphasized the importance of shared practices and collaboration to achieve rapid, sustainable growth in the digital age. By working together, member states can overcome challenges and leverage collective expertise.

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A critical aspect of the DCO’s mission is promoting greater female participation in the tech sector. AlYahya, an advocate for women in technology, highlighted initiatives like WE-Elevate, which supports women-owned businesses in transitioning online. This programme offers comprehensive training, enabling women to expand their reach and create job opportunities.

Furthermore, the DCO’s Unified Framework for Empowering Women in ICT aims to develop female leaders in technology. AlYahya’s NGO, Women Spark, complements these efforts by mentoring women developers, tech founders, and angel investors. The initiative has trained over 27,000 women and invested in more than 40 ventures, showcasing the potential of female empowerment in the tech industry.

During her visit, AlYahya reaffirmed the DCO’s commitment to Cyprus’ digital agenda. Discussions with President Christodoulides and other officials focused on assessing progress and planning future initiatives. Meetings with Invest Cyprus paved the way for action-oriented projects designed to drive tangible progress.

AlYahya’s vision for Cyprus’ digital economy is bright. She advocates for a regulatory environment that fosters innovation, viewing regulations not as obstacles but as enablers. By bridging the gap between innovators and the public sector, Cyprus can create a thriving digital ecosystem.

In conclusion, AlYahya’s optimism and strategic vision for Cyprus underline the nation’s potential to become a digital leader. Through collaboration, innovation, and inclusive growth, Cyprus is poised to achieve significant advancements in the digital economy, benefiting its citizens and setting an example for others.

Inflation in Cyprus has decreased significantly to 1.5% during the first half of 2024, marking a notable reduction from previous years. This decline is largely attributed to stabilised energy prices and effective monetary policies. The Central Bank of Cyprus reported that the deceleration in inflation was driven by a combination of reduced global energy prices and a stronger euro, which helped mitigate import costs.

Energy Prices and Economic Stability

The stabilisation of energy prices played a crucial role in the overall reduction of inflation. In previous years, fluctuations in energy prices significantly impacted the cost of living and production expenses. The recent steadiness in global energy markets has provided a respite, allowing for more predictable economic planning and reduced pressure on household budgets.

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Core Inflation and Food Prices

Despite the overall reduction, core inflation—excluding volatile items like food and energy—remains a concern. Persistent price increases in food and services continue to exert upward pressure. The Central Bank has noted that food prices have been particularly resistant to decline, influenced by factors such as supply chain disruptions and increased production costs.

Monetary Policies and Economic Measures

Effective monetary policies implemented by the Central Bank of Cyprus have also contributed to the reduction in inflation. Interest rate adjustments and other monetary tools have been employed to control inflationary pressures while supporting economic growth. These measures have helped maintain a balance between curbing inflation and fostering a conducive environment for investment and consumption.

Economic Outlook

The Central Bank remains vigilant in monitoring inflation trends, aiming to sustain economic stability and growth. While the decline in inflation is a positive development, the ongoing challenges in managing core inflation and food prices require continuous attention. The economic outlook for Cyprus remains cautiously optimistic, with the expectation that stabilised inflation will support broader economic recovery and growth.

In a significant move to protect consumers, Cyprus President Nikos Christodoulides has advocated for a bill to impose price caps on bottled water at specific locations, including airports, ports, stadiums, and beaches. This intervention comes amid parliamentary discussions and concerns about the lack of a comprehensive study and consultation on the proposal. The bill aims to ensure bottled water is available at a regulated price in key areas, despite fears of potential unintended consequences. The decision on the bill’s urgency will be made in an upcoming parliamentary session.

Government’s Position and Legislative Process

The Cypriot government, led by President Christodoulides, is pushing for rapid adoption of this bill. The president highlighted the government’s ongoing efforts to safeguard consumer interests and improve living standards through various measures. However, the parliamentary committee has deferred the decision to a leaders’ meeting, reflecting the need for a thorough examination of the proposal.

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Parliamentary Debate and Future Steps

Intense debates have unfolded in the parliamentary committee, with some members questioning the readiness and effectiveness of the proposed regulation. Energy Minister George Papanastasiou emphasized the necessity of the cap to protect consumers in monopolistic environments. The outcome of the leaders’ meeting will determine whether the bill will be fast-tracked for a vote or undergo further scrutiny in September.

This legislative push underscores the government’s commitment to consumer protection amidst broader economic considerations. For business professionals and consumers, the development of this bill highlights the balance between regulatory actions and market dynamics in Cyprus.

In an impressive display of market strength, Cyprus topped the European Union housing market growth charts in 2023, recording a staggering 31% increase in property prices. This growth, driven largely by foreign investment and robust demand, highlights the resilience and attractiveness of the Cypriot real estate market.

Key Drivers of Growth

Several factors have contributed to this remarkable increase. According to the Central Bank of Cyprus, the surge in property prices was significantly influenced by heightened demand, particularly from foreign buyers. These buyers accounted for nearly half of the property purchases in 2022 and the first quarter of 2023. Notably, there has been a considerable influx of professionals and investors relocating to Cyprus, driven by the country’s strategic policies aimed at attracting international headquarters.

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Regional Performance

The rise in property prices was not uniform across Cyprus. Districts like Limassol and Larnaca saw the most substantial increases. Limassol, for example, experienced a 10.6% annual increase in house prices, while Larnaca saw a 7.7% rise. The demand in these regions has been bolstered by the government’s headquartering policy, which has successfully attracted foreign companies and professionals.

Market Stability and Future Outlook

Despite global economic uncertainties, including the war in Ukraine and fluctuating energy prices, the Cyprus housing market has demonstrated remarkable stability. The construction cost index has begun to stabilize, which has further supported the property market. Additionally, despite rising interest rates driven by the European Central Bank’s monetary policies, the overall demand for properties has remained resilient.

The market’s robustness is also reflected in the Central Bank of Cyprus’s projections, which anticipate continued positive economic momentum. With a GDP growth rate forecasted at 2.4% for 2023, and further increases in the coming years, Cyprus is well-positioned to maintain its appeal to both domestic and international investors.

Α bill on the agreement between the Republic of Cyprus and the United States of America for cooperation on the use of travel information is to be tabled to the House Plenary for a vote this week.

Justice Minister, Marios Hartsiotis, told the House of Representatives Committee on Foreign Affairs that if the bill is passed on time, possibly at the end of 2024, “certainly within 2025”, we will be able to talk about visa liberalisation.

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During the session, Hartsiotis briefed the Committee members on the bill concerning the agreement between the Governments of the Republic of Cyprus and the US, regarding the use of travel information. He said that the agreement is one of the conditions for the inclusion of the Republic of Cyprus in the US visa waiver program.

On a practical level, he said, travellers to the US for a period of up to 90 days will have to fill out an online application, and that, in a short time, and at minimal cost, they will receive an answer, after their information is passed through the system.

He also noted that currently, those who want to travel to the US have to go through a difficult procedure.

If everything goes well and the bill is passed on time, the Minister said, possibly by the end of the year, or certainly within 2025, “we will now be able to talk about” visa liberalisation.

Hartsiotis also referred to a “massive benefit” regarding further shielding the State against all types of risks, such as organised crime, drugs, terrorism, etc. He also said that the Republic of Cyprus would have at its disposal “perhaps one of the most perfect” information exchange systems.

Chairman of the Committee, Harris Georgiades, said that the bill is to be tabled to the plenary this week.

The broad acceptance of the digital euro throughout the EU, high levels of security, ease of use and the guarantee for user privacy are some of the benefits of the digital currency – still in the planning stage – presented by the Central Bank of Cyprus.

CBC officials at a press conference on 9 July noted that the digital euro is not intended to replace cash and existing electronic payment options, but to add another option.

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In his welcome address, Central Bank Governor Christodoulos Patsalides noted that the Eurosystem is considering the possibility of launching a digital currency, similar to what almost all central banks around the world are doing. The Governor underlined that a strong euro underpins the autonomy of the EU for the benefit of consumers and businesses, noting that while the Eurosystem is preparing for the future of the euro, the welfare of citizens remains the ultimate goal.

In a video message, Piero Cipollone, member of the Executive Board of the European Central Bank and Chairman of the High-Level Task Force on the Digital Euro, explaining the potential uses of the digital euro in the Cypriot economy, said that “Cyprus attracts millions of tourists every year. Tourism is a significant part of your economy, creating jobs and opportunities for everyone. Making payments is a key part of our lives, including when we are on holiday. At present, European tourists who do not wish to pay with cash are entirely dependent on non-European payment methods for transactions with Cypriot hotels, restaurants, taxis and other services. This lack of alternative solutions forces local merchants to accept these non-European payment options, and the resulting lack of competition naturally drives up the costs they must bare”.

The presentation of the digital euro was made by Stelios Georgakis, Acting Senior Director of the Banking Division of the CBC, who explained through specific examples why the digital euro is a key pillar for truly European, innovative, direct and seamless retail payments.

Georgakis clarified that the Eurosystem is carrying out preparatory work to be able to launch the digital euro, if and when necessary, provided that the package of legislative acts of the European Commission will be finalized.

Furthermore, he said that the digital euro, if launched, would be a European initiative that would offer something unprecedented: a truly European digital means of payment accepted throughout the euro area, governed by a legal tender regime, offering the highest level of privacy and protecting users’ personal data.

Regarding the way the digital euro is expected to affect banks and businesses, Georgakis noted that the Eurosystem will not change the current relationship between customers and payment service providers: banks, payment institutions and e-money institutions that are licensed and supervised will be able to offer their customers an additional payment option.

As for businesses, he said that they would have immediate access to funds to be collected through the digital euro, whereas today it may take 2-3 working days for electronic payments to be cleared, and they will also be in a better position to negotiate lower fees compared to the existing electronic payment fees they have to pay. Finally, he stressed the importance of strengthening Europe’s strategic autonomy and resilience through the digital euro, as eurozone citizens will have an additional choice, beyond the private sector’s choices, which may be affected by sanctions.

The European Central Bank (ECB) has announced its decision to maintain current interest rates until at least September 2024. This move reflects the ECB’s cautious stance in response to the ongoing economic situation, particularly concerning inflation and economic growth within the Eurozone. By holding off on any rate cuts, the ECB aims to ensure economic stability amidst fluctuating global economic conditions.Rates,

Economic Context and Future Projections

The ECB’s approach is driven by its dual mandate to manage inflation while fostering economic growth. Current economic indicators suggest that the ECB is prioritizing inflation control, recognizing the potential risks of premature rate cuts. The pause in rate adjustments provides the ECB with the flexibility to respond to economic changes without exacerbating inflationary pressures.

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Market Reactions and Economic Implications

The financial markets have shown mixed reactions to this announcement. Some investors are concerned that maintaining higher interest rates might slow economic growth, while others see it as a prudent measure to keep inflation in check. The ECB’s strategy is to balance these concerns, ensuring that any future rate changes do not destabilize the economy.

Looking Ahead

The ECB’s decision to hold interest rates steady until September sets the stage for careful monitoring and assessment of economic conditions over the coming months. This period will be crucial for determining the next steps in the ECB’s monetary policy. The central bank will continue to analyze economic data, aiming to make informed decisions that support long-term economic stability and growth.

The upcoming review in September will be a significant point for the ECB, potentially guiding the future direction of its monetary policy. Stakeholders and analysts will be closely watching the ECB’s assessments and projections to gauge the future economic landscape.

A concerning financial trend has emerged within Cyprus’ top-tier football clubs, as 18 out of 21 first-division teams have amassed over €4.8 million in unpaid taxes. This situation arises from missed instalments and current liabilities under a tax repayment plan introduced by the government in April 2023. The clubs with the highest outstanding debts include APOEL, Apollon, AEL, and Pafos FC.

Government Efforts and Club Non-Compliance

Despite governmental measures to provide tax relief and establish manageable payment plans, many clubs have continued to struggle with compliance, not only failing to meet their repayment obligations but also accruing additional debts. This persistent issue highlights significant challenges in the financial management practices of these organisations.

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Impact on Financial Stability

The accumulation of tax debts by these clubs raises critical questions about their financial stability and the sustainability of their operations. The repeated failure to adhere to tax repayment schedules suggests deeper systemic issues within the financial structures of these clubs, necessitating a review and potential overhaul of their fiscal strategies.

Government Plans and Future Outlook

In response to the ongoing non-compliance, the government is considering stricter measures, including the potential increase of the betting tax, which could impact the revenue streams of these football clubs. The government remains committed to ensuring that these clubs fulfil their tax obligations, which is crucial for maintaining fiscal order and supporting the broader economic framework.

The continued financial difficulties faced by Cyprus’ football clubs underline the need for more robust financial oversight and management practices. As these clubs play a significant role in the cultural and social fabric of the country, ensuring their financial health is of paramount importance.

Cyprus has maintained its position as a “Strong Innovator” in the European Innovation Scoreboard for the third consecutive year. Ranked 10th among EU member states, Cyprus achieved 106.3% of the European average, marking the highest growth in innovation performance across Europe since 2017. The Deputy Ministry of Research, Innovation and Digital Policy reported increases in 15 of the 32 assessed indicators this year. Notably, Cyprus excelled in categories like “Linkages” and “Attractive research systems,” showcasing effective collaborations and robust research outputs.

Innovation Ecosystem and Government Policies

Deputy Minister Dr. Nicodemos Damianou highlighted the significant evolution and performance of Cyprus’ research and innovation ecosystem, attributing success to effective government policies. The country aims to create favourable conditions for scientists and entrepreneurs, ensuring that research and development spending translates into tangible benefits for society and the economy.

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Focus on Collaboration and Research Excellence

Cyprus was acknowledged as a top performer in “Linkages,” reflecting strong collaborations between innovative businesses and research institutions. Additionally, the country scored high in “Attractive research systems,” underscoring the quality of its international scientific publications and the presence of prestigious research institutions.

Commitment to Continuous Improvement

The Deputy Minister stressed the importance of continuously evaluating and improving the innovation ecosystem. Through a new impact assessment mechanism, the government aims to ensure that Cyprus’ trajectory in innovation remains on a path of substantial improvement, benefitting both the economy and society.

By maintaining its strong position in the European Innovation Scoreboard, Cyprus demonstrates its commitment to fostering a dynamic and innovative environment, driving progress and development across multiple sectors. This achievement reflects the country’s strategic focus on research, innovation, and collaborative growth, positioning it as a key player in the European innovation landscape.

In a bold economic declaration, Cyprus’ President Nikos Christodoulides revealed a budget surplus forecast for 2025 during a recent Cabinet meeting. This announcement underscores the government’s strategic focus on fiscal responsibility, strong financial systems, and comprehensive reforms.

Strategic Fiscal Management

President Christodoulides emphasised the critical need for meticulous budget management across ministries. He called for a detailed review of each ministry’s budget to categorise non-negotiable operational costs alongside social and developmental expenses. The intent is to ensure every ministry aligns its priorities with the overarching budget ceilings, promoting efficient utilisation of resources.

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Pillars of Economic Strength

The proposed surplus is built upon three foundational pillars: fiscal discipline, a robust financial system, and aggressive reforms. This approach aims to solidify Cyprus’ economic resilience, fostering a stable environment conducive to sustainable growth and development.

Social and Developmental Focus

Central to the budget are the “flagship policies” targeting digital transformation, climate change, and addressing infertility, reflecting a holistic approach to national development. The government’s commitment to a “social contract” with its citizens is evident, promising enhanced social spending and developmental initiatives.

Transparent and Inclusive Governance

In a bid to maintain transparency and public engagement, President Christodoulides has mandated that each ministry publicly present its budget and outline specific actions and reforms. This move is designed to ensure that the annual budget reflects both the President’s vision and the governance programme’s priorities.

Supporting the Middle Class

Government spokesperson Konstantinos Letymbiotis highlighted that the budget will particularly focus on supporting the middle class. The detailed presentations from the Ministries of Labour and Social Insurance, Energy, Trade and Industry, Foreign Affairs, and various Deputy Ministries reflect a comprehensive approach to policy implementation.