31.06.2022
The government intends to continue its support to vulnerable populations in the face of rising inflationary trends, said Finance Minister Konstantinos Petrides, speaking on the sidelines of the presentation of the Sponsorship Scheme for student residences and rooms in the old city of Nicosia.
The government intends to continue its support to vulnerable populations in the face of rising inflationary trends, said Finance Minister Konstantinos Petrides, speaking on the sidelines of the presentation of the Sponsorship Scheme for student residences and rooms in the old city of Nicosia.
According to the minister, “we really live in an era of inflation, not only in Cyprus, but throughout the European Union. The reason is purely exogenous, due to the war in Ukraine and the rise in oil and gas prices, due to to the fact that 30% of grain production is leaving the world production because of the situation in Ukraine and Russia, because of the sanctions. It’s not something no country can handle on its own.”
“What we are doing, have been doing and will continue to do is try to mitigate the impact as much as possible, especially for the most vulnerable groups,” Petrides said, adding that Cyprus is the only country in the EU that has also taken action . horizontal measures: “There is no other country that has reduced the tax on fuel horizontally and for everyone, other countries have chosen to give some benefits only to the vulnerable, we have reduced the VAT on electricity horizontally within a few months, from 19% to 10%. targeted at the vulnerable and lowered it from 19% to 5%. Due to rising fuel prices, we have also taken other targeted actions, such as a 50% increase in benefits in mountainous areas . Only at the last Cabinet meeting, we approved 8.5 Euro. million to help the livestock sector cope with rising feed and grain prices, in addition to the €16 million already provided.”
“We will continue to do this as long as our resources allow, but we will have to save some of the state’s resources due to this uncertainty,” he added.
Commenting on current inflationary trends, the minister said that they were indeed not predicted at the global level: “We used a significant part of the reserves to support society during the pandemic, and one of the reasons why we see that consumption is still at a fairly high level , despite inflation, precisely because revenues were supported and increased, even deposits increased during the pandemic, of course, at an incredible fiscal cost to the state.”
He said that from now on, consistency is needed. “We will monitor the situation, times are not easy. I make no secret of the fact that prosperity in Europe in recent years is very much due to relatively low fuel prices.”
“These things are changing, it won’t be free. I am not a populist and will never be a populist, there will be a price due to the current situation. I hope that inflationary trends subside, but we must know that we still have the cheapest fuel prices in the EU at the moment,” he stressed.
“We will try to focus on protecting the vulnerable and from there, through growth and investment, we will try to increase income. Certainly, the next few years will be quite difficult not only for the Cypriot economy, but especially for the European one,” he said.
He added that inflation for April closed at 7.1%, which is also lower than other EU countries, which is a very bad thing because it erodes purchasing power.
