The Finance Ministry has welcomed the observations and recommendations made by the International Monetary Fund (IMF) during its mission to Cyprus as part of the Article IV consultations.
In a statement released on Friday, the ministry expressed agreement with the IMF’s assessment that the Cypriot economy has demonstrated resilience in the face of successive shocks and that fiscal indicators remain strong and on the right track.
Regarding the recommendations, the ministry acknowledged the importance of focusing fiscal policy on reducing public debt while avoiding any fiscal relaxation.
This aligns with the reference trajectory set for the increase in net primary expenditures under the new European economic governance framework.
The ministry also stated that “the real estate sector is being closely monitored due to its significant impact on various aspects of the economy and macroeconomic stability“.
On judicial reforms, the ministry emphasised its collaboration with all relevant stakeholders to implement changes under the Recovery and Resilience Plan.
These reforms aim to enhance efficiency and increase productivity, which will, in turn, support further economic growth and investment.
Discussing labour market issues, the ministry noted that “employment conditions have eased compared to previous years”.
“With unemployment now at full employment levels, policies should focus on aligning workforce skills with labour market needs, increasing female employment—which remains lower than that of men—and further reducing youth unemployment,” it added.
Moreover, the ministry said that despite a substantial drop from its peak in 2014, youth unemployment remains relatively high.
On energy, environmental, and climate issues, the ministry reaffirmed “the government’s commitment to meeting its obligations under the national energy and climate plan, pledging to make every effort to uphold these commitments”.
