Philenews

Persianis: No Concerns About Fiscal Measures Due to Declining Debt

Published February 25, 2026, 14:12
Persianis: No Concerns About Fiscal Measures Due to Declining Debt

Michalis Persianis, President of the Fiscal Council of Cyprus, stated that there is no concern about taking fiscal measures, as Cyprus's public debt is decreasing and is expected to fall below 60% of GDP by 2025. Despite potential overruns in primary expenditure, the debt dynamic does not cause concern, while the state's liquid assets remain at high levels, close to 10% of GDP, due to revenues from the CDI. Mr. Persianis estimated that the downward trend in debt will continue in 2026 and possibly 2027. However, he warned that economic growth is based on a few sectors, which are vulnerable due to their dependence on foreign companies. In addition, an increase in social spending and significant funding needs for infrastructure, such as water, energy projects and transport, are expected. Mr. Persianis stressed that the maturation of these needs may limit fiscal space, especially if there is no timely planning. He also referred to the problem of inflexible expenditure, which limits government flexibility and may lead to pro-cyclical policies. Regarding wages, he argued that increases in real earnings come from a few sectors, overestimating household disposable income. In addition, the difference between GNI and GDP is increasing, as primary income flows out of Cyprus. The Central Bank of Cyprus confirmed the strong growth and resilience of the Cypriot economy, with low unemployment and inflation.