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Inflation Declines To 1.5% In First Half Of 2024

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.

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.

Digital Transactions: A Green Approach To Finance In Cyprus

As Cyprus increasingly embraces digital transactions, the environmental benefits of this shift are becoming evident. A recent report highlights that digital payments significantly reduce the carbon footprint associated with traditional banking operations. By decreasing the reliance on physical branches, paper-based processes, and the transportation of cash, digital transactions are contributing to a more sustainable financial ecosystem. This transition is in line with global initiatives to combat climate change and underscores Cyprus’ commitment to promoting a cleaner, more efficient financial landscape.

Digital transactions are not only more convenient and efficient but also significantly less resource-intensive. Traditional banking often involves extensive paperwork, the use of physical infrastructure, and the transportation of money, all of which contribute to higher carbon emissions. In contrast, digital transactions streamline these processes, resulting in lower energy consumption and reduced waste.

The environmental advantages of digital transactions are complemented by their economic benefits. By lowering operational costs and enhancing transaction speed and security, digital payments provide a compelling case for broader adoption. This shift supports sustainable development goals and aligns with the global push towards greener, more resilient economies.

Furthermore, the widespread adoption of digital transactions in Cyprus is expected to drive innovation within the financial sector. With the integration of advanced technologies such as blockchain and artificial intelligence, the digital financial landscape is set to become even more efficient and secure. These innovations not only enhance user experience but also contribute to environmental sustainability by further reducing the need for physical resources.

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