Cyprus government approves €70 million cost-of-living support package

On September 30, 2026, the Cypriot Cabinet approved a €70 million aid package to mitigate the impact of inflation and rising living costs. Finance Minister Makis Keravnos announced that the new measures, which complement existing support programs, bring the total government expenditure to approximately €160 million. The strategy is funded by budget surpluses and a reduction in public debt.

The package includes several key initiatives: a one-off payment of €200 to 53,511 vulnerable citizens, an extension of electricity bill subsidies for 23,300 households and 82,500 businesses through 2027, and zero VAT on essential goods including bread, milk, and meat starting October 12, 2026. Additionally, the consumption tax on heating oil will be reduced from 7.4 cents to 2.1 cents per liter from November 1, 2026, to April 30, 2027, and VAT on residential photovoltaic systems will drop from 19% to 9% effective immediately. Support for mountainous regions will also be increased.

These interventions follow weeks of mounting pressure from consumer groups and businesses struggling with high fuel and energy costs. The government aims to protect household purchasing power while maintaining fiscal discipline, with implementation set to begin in the coming weeks.