Nicosia, Cyprus. The Cypriot government’s package of eight measures to combat rising costs amid the ongoing conflict in the Middle East is worth €100 million, government spokesman Konstantinos Letymbiotis said on Wednesday.
Government position and assessment
Letymbiotis said measures amounting to €100 million were already in place before the crisis, when inflation in Cyprus was almost zero, and that a further €100 million was added with last week’s cabinet decision. He said various scenarios were being drawn up regarding the duration of the crisis and stressed the importance of solid financial foundations.
He said the government’s ability to take the measures it has taken, and to take additional measures if necessary, rests on solid economic foundations, fiscal capabilities and fiscal space, which he attributed to responsible economic policy. Asked whether further economic measures may be announced, he said the government evaluates data daily in line with developments.
Letymbiotis said the region was facing a crisis whose duration and depth were not yet known, nor the possible effects on energy prices and the cost of living.
Details of the eight measures
The measures announced last week include extending the reduced 5% value added tax rate on electricity until May next year, after it had been expected to expire next month. Fuel consumption tax will be reduced by 8.33 cents per litre between now and June.
VAT on meat, poultry and fish will be set to zero between now and September. “Green taxes” on fuel, which had been set to raise the retail price of fuel by nine cents per litre, will not be implemented.
The government will cover 30% of wages for all workers in the hotel sector during this month and will draw up a special plan for more support for airlines to secure seamless connectivity with important destinations to attract tourists.
The government will also subsidise 15% of the cost of fertiliser and agricultural supplies for farmers in April and May, with the subsidies for farmers counted as two separate measures.
How do you expect the measures to affect your household costs over the coming months?
