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Cyprus Government’s Economic Policy: A Blueprint for Growth and Stability

by THEFUTURE.TEAM

October 1, 2025

Strong Budgetary Outlook for 2026

The President of the Republic, Nikos Christodoulidis, announced positive outcomes from the government’s policy initiatives during an afternoon session of the Cabinet Council held at the Presidential Mansion. The focal point of the meeting was the 2026 state budget, heralded as a symbol of economic strength and forward-looking development.

A Robust and Surplus Budget

At the outset, President Christodoulidis highlighted the importance of maintaining a dynamic economy—a priority among the government’s top five strategic objectives. The newly presented budget is not only surplus but also grounded in stability, offering a blend of social and developmental mandates. This financial blueprint underscores the government’s unwavering commitment to strategic investments and sustainable growth.

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Enhanced Social and Developmental Investments

Significant increases are planned in both developmental spending and social policy allocations. Notably, developmental expenditures are set to rise by 4.7% in addition to the 4% increase recorded in the 2025 budget. Social services, which saw a 5.3% boost in the previous year, are slated for a further 6.7% increase. Such measures are indicative of a policy designed to balance fiscal discipline with impactful public spending.

Reduction in Public Debt

One of the key highlights of the session was the projected decline in public debt. The debt-to-GDP ratio is expected to decrease from 73.6% in 2023, when the current administration assumed office, to 52.9% by 2026—placing Cyprus among the low-debt economies within the Eurozone. This significant reduction demonstrates prudent fiscal management and augurs well for long-term economic stability.

Strategic Focus on Education, Health, and Transformation

President Christodoulidis reiterated the government’s prioritization of sectors critical to national development. Investments in education, healthcare, and social welfare are being bolstered alongside initiatives for digital transformation and the green transition. Projections for 2026 include a growth rate of 3.1% and an unemployment rate maintained below 5%, approximately at 4.6%. Such targets reflect a resilient and balanced approach in the face of global uncertainties.

A Commitment to Responsible Governance

Drawing comparisons with economic conditions in major Eurozone countries and acknowledging Cyprus’s unique geopolitical challenges, the President emphasized that these results are a testament to responsible economic policy. The administration’s clear mandate remains: to act in the best interests of the Cypriot people, ensuring that responsible governance prevails without resorting to experimentation.

Looking Ahead

Concluding the address, President Christodoulidis affirmed that the government would persist in delivering results with the same sense of accountability. The approved 2026 budget marks the third fiscal plan under the current administration, underscoring a consistent commitment to transparency, fiscal prudence, and strategic development.

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Central Bank Of Cyprus Balance Sheet Reflects Strong Eurosystem Position

by THEFUTURE.TEAM

February 17, 2026

Overview Of Financial Stability

The Central Bank of Cyprus (CBC) has released its latest balance sheet, reaffirming its steadfast role within the Eurosystem. The balance sheet, featuring total assets and liabilities of €29.545 billion, underscores the institution’s stable financial posture at the close of January 2026.

Asset Allocation And Strategic Holdings

Governor Christodoulos Patsalides issued the balance sheet, which details the CBC’s asset composition under the Eurosystem framework. Notably, the bank’s gold and gold receivables amounted to €1.635 billion, providing a significant hedge and stability to its balance sheet. Additional asset categories include claims on non-euro area residents denominated in foreign currency at €1.099 billion, while claims on euro area residents in both foreign and domestic currency add further depth to its portfolio.

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The most substantial asset category, intra-Eurosystem claims, reached €19.438 billion, an indication of the CBC’s deep integration with its European counterparts. Furthermore, euro-denominated securities held by euro area residents contributed €6.587 billion. Despite a marked emphasis on these areas, lending to euro area credit institutions in monetary policy operations recorded no activity during the period.

Liability Structure And Monetary Policy Implications

On the liabilities side, banknotes in circulation contributed €3.218 billion. Liabilities to euro area credit institutions associated with monetary policy operations were notably the largest single category, totaling €17.636 billion. Supplementary liabilities included those to other euro area residents, which aggregated to €4.989 billion, with government liabilities playing a predominant role at €4.754 billion.

Other liability items, such as claims related to special drawing rights allocated by the International Monetary Fund at €494.193 million, and provisions of €596.571 million, further articulate the CBC’s exposure. Revaluation accounts stood at €1.643 billion, and overall capital and reserves were confirmed at €333.822 million, completing the picture of a well-capitalized institution.

Conclusive Insights And Strategic Alignment

The detailed breakdown illustrates the CBC’s sizeable intra-Eurosystem exposures, reinforcing its central role within Europe’s monetary landscape. With an asset-liability balance maintained at €29.545 billion, the CBC’s financial position remains robust, indicating a commitment to structural stability and strategic risk management.

This fiscal disclosure not only provides transparency into the CBC’s operations but also serves as a benchmark for comparative analysis among other central banks within the Eurosystem, highlighting the intricate balance between asset liquidity, regulatory oversight, and monetary policy imperatives.