ECONOMY

Cyprus to manage supply chain issues

Cyprus to manage supply chain issues

Cyprus’ Deputy Minister of Shipping Vassilis Demetriades said on Friday that the country’s supply chain is not expected to be significantly affected by the war in Ukraine and that, for now, the situation is manageable.

In comments made during a visit to the seaside city of Paphos, Demetriades said that the problems in the supply chain, which started as a result of the pandemic, have worsened cumulatively because of the war and prices have risen due to the increase in tanker freight rates, “so, inevitably, some price hikes and some costs will be passed onto consumers.”

Asked about the price rises on various commodities and whether they are proportional to the increase in freight rates, the deputy shipping minister replied in the affirmative, noting that the increase in tanker fees has been quite large. He also pointed out that it is only natural that these costs are passed onto the final product, but said that the authorities are monitoring the situation on a daily basis.

“We are waiting to see the scope and form of sanctions imposed by the European Union and the international community,” he added, because “the impact on Cyprus will depend on the formulation of the sanctions.”

Demetriades also said that maritime transport sanctions are manageable at the moment, stressing that the shipping industry has not been badly affected. “We have formulated a strategy to make our shipping industry resilient to crises,” he added, noting that “this is why we are turning to other markets to attract companies and ships to Cyprus.”

Last Wednesday, Cypriot Finance Minister Constantinos Petrides visited Germany, at the invitation of his German counterpart, Christian Lindner, and the two officials discussed the economic fallout of the war in Ukraine, the state of play and the challenges facing Europe, placing special emphasis on the inflationary pressures and the drafting of suitable fiscal and energy policies.

Meanwhile, the IMF warned in a report last week that “despite a reduction in exposures to Russia, Cyprus is highly vulnerable to the economic fallout from the war in Ukraine,” noting that 20% of its tourism comes from Russia.

Demetriades further announced that public consultation on the maritime spatial planning of Cyprus has been under way since last Thursday and that an open meeting is being organized on April 14 for this purpose in Paphos.