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Cyprus’ Economic Strategy: Aiming for Sustainable Growth by 2028

by News Editor

June 13, 2025

Strategic Fiscal Policies to Boost Cyprus’ Economy

The Finance Ministry recently unveiled its strategic fiscal policy framework for 2026 to 2028, laying the groundwork for anticipated economic stability and reduced public debt over the next four years.

Projected economic growth rates vary from 2.9% to 3.1%, while public debt is expected to drop significantly to 43.3% of GDP by 2028. The plan marks a commitment to safeguarding fiscal health amidst geopolitical risks, and a dedication to structural reforms remains key.

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The framework sets budgetary ceilings for ministries and public bodies based on macroeconomic outlooks, striving for transparency and efficient resource use.

The Cyprus government targets a 3.5% budget surplus in 2025, gradually increasing to 3.7% by 2028, reflecting the sound fiscal principles guiding its economic policies.

Inflation control is also on the agenda, poised to stabilize around 2% by 2028, ensuring economic resilience in uncertain times.

Unemployment rates are predicted to linger around 4.5% by 2028, as revised fiscal strategies bolster job creation.

Strategic funding sources include new bond issuances, bilateral loans from the European Investment Bank, and the issuance of individual bonds, all integral to the envisioned fiscal landscape.

Central government revenues are set to climb, with ceilings for expenditures meticulously determined to align with fiscal goals.

Potential risks involve geopolitical instability and economic challenges from existing sanctions affecting Cyprus’s service sector.

With a strong focus on public sector improvements and efficient governance, Cyprus aims to reinforce climate and energy security and push for digital transformation to drive a competitive economy.

As Cyprus gears up for its EU Presidency, it highlights ongoing efforts to implement reforms and investments in various sectors.

The government’s unwavering commitment to fiscal stability aims to enhance the landscape for sectors like tourism and higher education, ensuring a stronger, more resilient economy for the years ahead.

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Bank Of England Holds Rates At 3.75% In Split Vote As Inflation Risks Rise

by THEFUTURE.TEAM

September 17, 2026

The Bank of England kept its benchmark interest rate at 3.75% on Thursday, but the decision was not unanimous. In a 6-3 vote, the Monetary Policy Committee kept rates unchanged, while three members backed a 25-basis-point increase to 4%. Renewed energy price pressures have added to concerns that inflation could remain elevated.

Inflation Pressures Remain

Policymakers said inflation “is likely to rise further over coming quarters,” citing higher and more volatile crude oil and refined energy prices since the conflict began.

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So far, there has been “little evidence” of significant second-round effects, such as broader wage and price increases. Inflation risks, however, are now “tilted to the upside” and have increased since the July Monetary Policy Report.

Energy Prices Add To Inflation Risks

Brent crude has risen 36% since July, reaching $106 a barrel on Sept. 14, while UK wholesale gas prices increased 78% to 207 pence per therm.

Higher energy costs can feed into transport, production and household expenses, raising costs across supply chains. Refinery pressures have also pushed crack spreads, the difference between refined fuel and crude prices, well above pre-conflict levels.

Economy Shows Resilience

Despite the inflation risks, UK economic activity has held up slightly better than the Bank expected. A softer labor market and higher borrowing costs are expected to help reduce inflation over time.

Previous monetary tightening is still working through the economy, according to policymakers. So far, the latest energy shock has not produced clear evidence of a broader wage-price spiral.

Major Central Banks Take Different Paths

The decision comes during a busy period for global monetary policy. The Federal Reserve raised rates Wednesday to 3.75%-4% in its first increase since 2023, while the European Central Bank recently lifted its deposit rate to 2.5%.

The Bank of Japan is due to announce its decision Friday, with markets expecting a rate increase. Thursday’s split vote shows that pressure for tighter policy remains within the Bank of England’s Monetary Policy Committee.