Cyprus government prepares new anti-inflation measures

The Cypriot government, led by the administration of President Nikos Christodoulides, is finalizing a new package of cost-of-living relief measures to be presented at the next cabinet meeting this Wednesday. Finance Minister Makis Keravnos confirmed that the government is evaluating the ongoing impact of geopolitical developments on the domestic economy. While the priority remains providing targeted support to low-income households, pensioners, and vulnerable groups, the Minister indicated that horizontal measures may be adopted where specific targeting is not feasible.

Key components of the upcoming proposal, according to reports, include the renewal and potential expansion of the zero-VAT policy on essential goods such as meat, poultry, fish, and dairy products. Additionally, the government is considering further subsidies for electricity costs and a reduction in excise duties on heating oil, starting in November. These interventions aim to mitigate the pressure from rising fuel and energy prices, which have significantly impacted household purchasing power. Currently, existing support measures, including a 5% VAT rate on electricity for approximately 33,000 households and an 8.33 cent-per-liter reduction on transport fuel taxes, remain in force as authorities continue to monitor the situation daily.