Breaking news

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.

Follow THE FUTURE on LinkedIn, Facebook, Instagram, X and Telegram

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.

The Future Forbes Realty Global Properties

Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

by THEFUTURE.TEAM

June 26, 2026

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

Follow THE FUTURE on LinkedIn, Facebook, Instagram, X and Telegram

Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.