Projected Inflation Rate
The annual inflation rate in Southern Cyprus is projected to rise to 4% in 2026. This forecast is included in the Budget Policy Report published by the Greek Cypriot Ministry of Finance. Presenting the report to the Greek Cypriot parliament, Finance Minister Makis Keravnos highlighted the factors driving the increase in inflation.
Keravnos noted that while the overall growth trend of the Greek Cypriot economy is satisfactory, measures need to be taken in response to sensitivity to the energy crisis and rising inflation. Additionally, it was reported that the annual inflation rate increased from 0.5% to 3.1% in the first half of the year, with expectations for it to reach 4% by the end of the year.
Economic Developments and Forecasts
The Budget Policy Framework for 2026 anticipates that the inflation rate could rise from 0.8% to 4.5% due to sudden increases in international oil prices. Keravnos stated that economic growth was realized at a rate of 3.3% in the first half and expressed the aim to maintain this level. However, growth is expected to decline to 2.7% in 2026.
Keravnos remarked that a budget surplus of 1.1% was recorded in terms of Gross Domestic Product (GDP) during the first six months of the year, and the total budget surplus for the year is targeted to be 900 million Euros. This is seen as an important indicator of the government’s commitment to maintaining fiscal discipline.
Source: www.diyaloggazetesi.com
