The Government's determination to continue the support it has provided to vulnerable groups of the population against the increasing inflationary trends and the resulting accuracy was expressed by Finance Minister Konstantinos Petridis, who was speaking on the sidelines of the presentation of the Sponsorship Scheme for Student Residences and Rooms in Nicosia.
As the Minister noted, "unfortunately we are indeed living in an era of inflation, not only in Cyprus but throughout the European Union. The reason is purely exogenous, due to the war in Ukraine and the increase in oil and gas prices, due to the fact that 30% of grain production is going out of the world production because of the situation in Ukraine and Russia, due to the sanctions. It is not something that any country can deal with on its own."
"What we are doing and have done and will continue to do is to try to mitigate as much as possible the consequences, especially for the most vulnerable groups," Petridis said, adding that Cyprus is the only country in the EU that has also taken horizontal measures: "There is no other country that reduced excise duty on fuel horizontally and for everyone, other countries chose to give only some benefits only to the vulnerable, we reduced horizontally the VAT on electricity for several months, from 19% to 10%. We further targeted the vulnerable and reduced it from 19% to 5%. Because of the increase in fuel prices we did other targeted actions, such as a 50% increase in allowances in mountain areas. We have given 8.5 million in the last cabinet alone to help the livestock sector to cope with increases in feed and grain prices, in addition to another 16 million given to the livestock sector."
"We will continue to do this as long as our resources allow. But because of the uncertainty which prevails and because we do not know how long this situation will continue certainlywe will have to safeguard some of the state's resources because of this uncertainty," he added.
Commenting on the current inflationary trends, the Minister said that indeed these had not been predicted at the global level: "We have used enough of the reserves to support society during the pandemic and one of the reasons why we see that consumption is still at quite high levels despite inflation is precisely because of the fact that incomes had been supported and had increased, even deposits during the pandemic, this of course at an incredible fiscal cost to the state."
He stressed that from now on "we need consistency, we will monitor the situation, times are difficult. I make no secret of the fact that the prosperity that has been built up in Europe in recent years was to a very large extent due to the relatively low price of fuel."
"These things are changing, it will not be without cost. I am not and will never be a populist, there will be costs because of the situation that is taking shape. I hope that inflationary trends will subside, but we have to know that we still have the cheapest fuel in the EU at the moment."
[/P]"We will try to target the protection of the vulnerable and from there through growth, through raising investment we will try to raise incomes."
[/P]"We will try to target the protection of the vulnerable and from there through growth, through raising investment we will try to raise incomes. Certainly the next period, the next few years will be quite difficult not only for the Cypriot economy but especially for the European economy," he said.
He added that inflation for April closed at 7.1 percent, which is also lower than other EU countries which he said is a very bad phenomenon as it erodes inflation and purchasing power.
Source: CNA
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