Everyone's wish is to continue the development course on a healthy basis and to normalize as soon as possible the effects of the health crisis and the war in Ukraine, said the Chairwoman of the Parliamentary Committee on Finance, at the summary presentation of the Committee's report on the 2023 Budget in the Plenary Session of the Parliament. The Commission's conclusion is that Cyprus is surrounded by conditions of uncertainty, however it maintains a positive growth rate.
The Budget as originally submitted to the Parliament envisages expenditure of €7,569 million and shows a 3.5% increase in expenditure compared to the originally budgeted expenditure of the 2022 Budget, she said.
"The Parliamentary Finance Committee notes that the Cypriot economy, despite the impact of the pandemic and the war in Ukraine, maintains a positive growth rate for 2022, marginally higher than the previous year, exceeding the Eurozone average," Erotokritou said.
In addition, she noted that GDP is on an upward trend which is projected to continue at a slower pace in the coming years. The fiscal balance of the general government, after two years of a negative path, due to the pandemic response measures, turned positive and further improvement is forecasted after the next three years.
The public debt, after a large increase in 2020, showed a decrease in 2022 as well, which, according to the Finance Minister, is considered particularly important for the future path. Inflation is projected for 2022 to reach 7.7%, the highest point in 40 years. The unemployment rate is recorded at 7%, down from 2021 and expected to fall further. Poverty and social exclusion indicators show a marginal improvement for 2021 and the income inequality index remained at around the same level.
The President of the Commission conveyed that all members of the Commission recognise the difficult conditions facing the Cypriot economy as a consequence of the impact of the coronavirus pandemic and the war in Ukraine. They also acknowledge the uncertainty of the forecasts on which the budget was based, due to increases in key interest rates by the ECB, high inflation, increases in energy prices. They also acknowledge the impact of these factors on public debt servicing costs and on public finances.
The majority of Commission members are concerned about the impact of inflation on consumers' purchasing power, on public finances and on the economy in general, although at European level the problem is forecast to ease in 2023.
Some members of the Commission express their satisfaction with the strong fiscal and growth margins delivered by the current government, stressing the importance of maintaining safety margins in view of the recession that major economies in Europe and globally may experience. They also endorse the position of the Minister of Finance on the continuation of fiscal surpluses to achieve the objective of further reducing public debt. They also point out that the good fiscal growth observed is a result of the high level of economic growth recorded for 2022.
In addition, Committee members stress the need to preserve fiscal frameworks and economic stability, in line with the country's commitments to the EU, as well as the need to accelerate the pace of economic growth given the serious challenges the country faces in the coming years, and point to the possibility of reviewing some of the policies that will be implemented in the coming years. "The Commission concludes that the Cypriot, as well as the European and global economy, is surrounded by uncertainty. The desire of all is to continue the growth path on a sound basis and to normalise as soon as possible the effects of the health crisis and the war in Ukraine."
The medium-term outlook for the Cypriot economy, according to the government's forecasts, is positive but surrounded by a high degree of uncertainty, she added. "The sustainable growth of the economy, further reducing public debt, achieving fiscal surplus, protecting the living standards of citizens from inflationary pressures and ensuring the welfare of citizens should be the main policies of the government," she said.
The President also noted that the promotion of the green economy, digital transformation, research and innovation, as well as the implementation of major development projects, are expected to contribute to the growth of the economy. The optimal use of EU instruments, and in particular the instruments for dealing with the effects of the pandemic and the war in Ukraine, will contribute to improving the economy and employment, he said.
"In the light of the above, the Commission with this report submits the budget under discussion and the amendments proposed by the government to the Plenary for the purpose of taking a final decision with regard to its approval or rejection," he said."
"In the light of the above, the Commission with this report submits the budget under discussion and the amendments proposed by the government to the Plenary for the purpose of taking a final decision with regard to its approval or rejection," he said.
At the same time, it "reserves its right and the right of other MPs to table amendments", while it also reserves its right as to the final figures of the budget, which may vary on the basis of cuts in specific allocations, as well as the final configuration of total expenditure in light of the approval or rejection of amendments that may be tabled by the government and MPs, she concluded.
Source: CNA
Contents of this article including associated images are belongs Cyprus Times
Views & opinions expressed are those of the author and/or Cyprus Times
Source
