Cyprus Fiscal Council warns on 2024 risks
The Cyprus Fiscal Council has been taking a close look at how the Cypriot economy is doing, and is now offering some important information based on its study. It supports the ideas that the 2024 budget is built upon, saying they could really help the economy if put into action. But, there’s a bit of worry about how much money the government will make and how much the economy will grow in 2024. The Finance Ministry is watching the money situation closely.
Despite prevailing challenges, Cyprus exhibits economic resilience, outperforming some counterparts. However, risks such as a possible economic slowdown and increased imports are noted. The council is particularly watchful of inflation, anticipating moderate price hikes in 2024.
The budget reflects heightened spending on infrastructure like roads and housing. While fiscal management is praised, caution is advised against excessive future spending, especially on budget items the council deems to be “inelastic.” Such spending (e.g. hirings) is difficult to reverse once commitments are assumed and has a cumulative effect on spending in the following years. Such inflexible spending also limits the fiscal room for policies.
