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19 January, 2022
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Government extends support schemes until end October

The Finance Minister said that despite the massive shock to the Cyprus economy, the support schemes, that so far amount to around 60, managed to mitigate consequences to a large extent


The Cabinet on Thursday decided to extend current government support programs aiming to cushion the blow of the coronavirus pandemic until the end of October, Labour Minister Zeta Emilianidou said.

The extension seeks to safeguard the viability of businesses and workers’ rights, Emilianidou said, noting that those businesses that participate in government support programs are bound by the condition that they are not able to lay off staff.

Among the schemes extended until the end of October were those in place to support the tourism industry that was hit hard by the coronavirus pandemic.

Emilianidou said the government will at a later stage announce additional special programs for workers and businesses, budgeted at over €14 million.

Speaking at Thursday’s news conference, Finance Minister Constantinos Petrides delved into the steps Cyprus took to mitigate the blow of the pandemic, which included some 60 support schemes implemented in three different phases, and which sought to protect income, particularly for vulnerable groups, to support the health sector, borrowers, and businesses.

"We are already traversing the 7th month of an unexpected, exogenous, and enormous health crisis, which interrupted the growth dynamics of a 6-year course for the Cypriot economy, with high growth rates and falling unemployment. An international crisis that has hit the entire planet and inevitably, could not leave the Cypriot economy intact. But the consequences would have been incomparably greater if the government had not acted with foresight and determination from the very beginning, and on the basis of a comprehensive program to deal with the crisis and mitigate the effects as much as possible," the Minister of Finance said.

"We have designed and implemented a coherent and integrated Program, making targeted and complementary interventions throughout society and the economy. Interventions that supported the disposable income of workers and vulnerable groups of the population, businesses and the vital health sector, thus creating a strong ‘social protection net’.”

Petrides said the effectiveness of the Cyprus government’s policies in relation to other countries is something that is currently recognized at European level, but also by the economic indicators or forecasts of the European Union itself.

“For example, according to statistics released by Eurostat a few days ago, the unemployment rate in Cyprus in July not only did not increase compared to last year but was marginally reduced, recording one of the best performances in unemployment at EU level,” Petrides said.

Petrides noted that the Cyprus economy saw a heightened recession of 11.9% in the second quarter of 2020, a period which saw a full lockdown and restrictive measures, compared to the 5.5% recession recorded in the first quarter.

“Taking this data into account, our forecast does not differ from last April's forecast, ie it remains the basic scenario for a contraction of GDP close to 7%, despite the fact that tourism is developing on the basis of the worst-case scenario.”

“In relation to consumption, in the first half of 2020, individual consumption decreased by 2.5%, while public consumption increased by 16.9% compared to the corresponding period of 2019. Overall, consumption increased by 1.3%, holding back the economic impact of the pandemic.”

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