Cyprus economy grows 3.3% in first half as inflation rises

Nicosia, Cyprus. Cyprus’ economy grew by 3.3 per cent in the first half of the year, while inflation rose from 0.5 per cent in January to 3.1 per cent in June, Finance Minister Makis Keravnos said on Tuesday.

Keravnos presented the semi-annual Fiscal Policy report to the cabinet and said the government was assessing measures to address inflationary pressures.

Economic performance

Keravnos said the Cypriot economy continued to grow at a satisfactory pace despite heightened geopolitical uncertainty, the ongoing energy crisis and higher global fuel prices.

He said first-half growth of 3.3 per cent was three times above the EU average. The government aims to maintain this performance, he added.

Labour market and inflation

The unemployment rate stood at 4 per cent during the first half of the year, which Keravnos described as evidence of a resilient labour market.

Inflation rose from 0.5 per cent in January to 3.1 per cent in June. The government forecasts that inflation will reach around 4 per cent by the end of the year.

Relief measures

Keravnos said the administration was taking measures to mitigate the effects of inflation, with relief measures costed at €200 million.

Asked whether the government would extend the reduced tax on fuel, he said measures were being assessed on an ongoing basis and that decisions would be taken depending on developments.