Cypriot economy shows resilience, growth outpaces EU average

The Governor of the Central Bank of Cyprus, Christodoulos Patsalides, has called on banks to consider the social dimension of their pricing policies while enhancing the economy's competitiveness. In an interview with CNA, Patsalides warned of the risk of damaging the banking sector's reputation if these factors are ignored.

Ahead of the European Central Bank's (ECB) upcoming monetary policy meeting on October 18, Patsalides pointed to sluggish economic growth in the Eurozone and indicators like the Purchasing Managers' Index (PMI), which fell below 50, suggesting potential room for interest rate cuts. However, he stressed the need for thorough discussions, considering the impact of ongoing Middle Eastern developments.

Patsalides highlighted Cyprus' economic resilience in the face of external shocks, with growth rates well above the EU average. He urged the continued expansion of the productive sector, fiscal discipline, structural reforms, and governance improvements based on best international practices.

While acknowledging the strong capital and liquidity levels of Cyprus' banking system, Patsalides cautioned against complacency. He emphasized emerging risks such as geopolitical tensions, climate change, and cybersecurity, which are difficult to predict and manage. He also previewed regulatory changes expected by year-end to ensure smooth banking operations and customer service, without compromising on the zero-tolerance policy against money laundering.

Regarding the Central Bank’s transformation, Patsalides underlined the importance of adopting a reliable central banking model that takes into account both ECB developments and Cyprus' unique characteristics. He called for collective decision-making and effective execution to achieve this.

[Information sourced from CNA]