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

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.

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.

Eurobank Plans €1 Billion Investment In AI And Digital Banking By 2028

Eurobank plans to invest about €1 billion in technology from 2025 through 2028, its largest technology investment program to date. The Banking Forward strategy focuses on digital banking, artificial intelligence, customer experience and a “phygital” model combining digital services with face-to-face support.

Digital Banking Dominates Customer Activity

Digital channels already account for 96% of Eurobank transactions, with 61% completed through the Eurobank Mobile App. Among customers aged 35 and under, digital adoption reaches 94%.

Customers make about 574 million annual logins across e/m-banking and more than 1 million digital transactions each day. During the first half of 2026, one in three banking products was acquired digitally.

AI Moves Into Everyday Banking

Eurobank is expanding the use of AI through tools including EVA, its digital customer assistant, and myEVA, an AI-powered voice assistant for employees. The technology is also being applied to mortgage assessments, customer feedback analysis and contractual documents.

The bank’s technology architecture is built around five areas: digital channels, customer experience orchestration, data and AI, core banking, and infrastructure and cloud. About 50% of its applications and digital channels are already cloud-based.

Investment Extends Beyond Technology

The program is intended to reshape how Eurobank operates, combining automation and AI with employee development and human support. The bank says the approach is designed to improve services while maintaining access to face-to-face banking when customers need it.

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