Analysis of current economic risks and performance in Cyprus

The Cypriot Ministry of Finance and the Fiscal Council have released reports detailing the current state and future outlook of the national economy. While the economy demonstrates growth, full employment, and fiscal surpluses, officials warn of emerging medium-term risks that could escalate into crises. The Ministry of Finance identifies internal threats, including the foot-and-mouth disease outbreak, the termination of work at the Vasiliko natural gas terminal, issues with the GSI project, and deficits within the state health organization (OKYpY). External pressures, particularly geopolitical developments, are also cited as significant factors. Michalis Persianis, the outgoing President of the Fiscal Council, emphasized the need for a conscious policy to preserve current economic gains. Concerns were raised regarding the long-term sustainability of funding permanent expenditures through non-recurring revenues. Key areas for these growing costs include climate initiatives, defense, energy network upgrades, natural disaster management, and housing policy. The reports also note potential risks to the banking system, specifically regarding a possible increase in non-performing loans.