Cyprus fiscal council warns of medium term economic risks
Outgoing Cyprus Fiscal Council president Michalis Persianis warned on Wednresday that the current positive trajectory of the economy must be supported by a conscious policy aimed at preserving its fundamental strengths . In his address during the presentation of the annual report for 2025 , Persianis stated that while the economy maintains the momentum of the past two years with healthy figures and resilient growth, risks are emerging on the medium-term horizon that could rea
Cyprus's economy is currently performing well, maintaining positive momentum with healthy growth, full employment, and controlled inflation. Public finances are also strong, showing increased revenue, reduced debt, and comfortable liquidity. However, the outgoing Fiscal Council president has cautioned that emerging medium-term risks could lead to a crisis. These risks stem from significant emerging needs in areas like climate, defense, and infrastructure, coupled with a structural issue of financing permanent expenses with temporary revenues.
Further concerns include the long-term sustainability of the economic model, the careful management of foreign investment, and the challenge of financing development while meeting recurring expenditures. The council highlighted a persistent weakness in strategic planning and noted growing external risks from global economic imbalances and the rise of shadow banking.
The warning highlights the need for proactive fiscal management and strategic planning to ensure the country's long-term economic stability despite current positive performance.
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