Cyprus Business Now: fiscal surplus, debt ratio, housing schemes, Vasiliko deal

Cyprus recorded a fiscal surplus of €631.80 million in 2023, corresponding to 2 per cent of its GDP, according to a report from the state’s statistical service.

Meanwhile, the public debt for the same year stood at €23.08 billion, representing 73.6 per cent of GDP.

Total revenue in 2023 rose by €1.82 billion (15.3 per cent), reaching €13.76 billion, compared to €11.94 billion in 2022.

Total government expenditure in 2023 grew by €1.97 billion (17.7 per cent), reaching €13.13 billion, compared to €11.16 billion in 2022.

Cyprus’ gross government debt-to-GDP ratio stood at 70.5 per cent at the end of the second quarter, reflecting a drop both on an annual and quarterly basis.

In contrast, the eurozone’s debt ratio stood at 88.1 per cent, while the average for the European Union was slightly lower at 81.5 per cent, according to data released on Tuesday by Eurostat.

Cyprus experienced the largest reduction in government debt to GDP ratio during this period, declining by 2.1 percentage points from the first quarter of 2024 and by 10.0 percentage points year-on-year.

Conversely, the eurozone’s ratio rose to 88.1 per cent, up from 87.8 per cent in the previous quarter, while the EU’s debt-to-GDP ratio increased from 81.3 per cent to 81.5 per cent.

Energy regulators in the EU have raised concerns that the slow rollout of smart meters is hindering the electricity system’s flexibility, according to Andreas Poullikas, chairman of the Cyprus Energy Regulatory Authority (Cera).

This delay, he pointed out, limits consumers’ access to dynamic pricing contracts and threatens the EU’s target of climate neutrality by 2050.

Poullikas mentioned that a recent report from the Agency for the Cooperation of Energy Regulators (ACER) indicated that nearly 75 per cent of EU households remain in fixed electricity contracts, restricting their participation in more adaptable pricing models.

Hellenic Bank has announced the launch of new and upgraded service points designed to bring innovation to banking transactions.

The new branches, equipped exclusively with advanced ATMs, will be located in strategic areas across Nicosia, Limassol, Larnaca, and Paphos.

Cyta this week unveiled its new corporate identity, emphasising technological innovation and a customer-centric approach.

During an event at the Cyprus Planetarium on October 21, the company showcased its renewed philosophy, focused on continual growth and better service for its customers.

Cyta’s CEO Andreas Neocleous highlighted that this shift is not just visual but reflects a new mindset.

“With the renewal of its visual identity, Cyta is not just changing its image; it is transforming its mindset and setting new, more ambitious goals,” he stated.

The Cyprus Securities and Exchange Commission (CySEC) on Tuesday released a statement requiring Cyprus Investment Firms (CIFs) to adopt the European Banking Authority (EBA) guidelines on the application of the group capital test, which will take effect on January 1, 2025.

According to the commission, these guidelines aim to establish uniform regulatory practices for calculating capital requirements for investment firm groups in accordance with Article 8 of Regulation (EU) 2019/2033 (the IFR).

Moreover, the purpose is to ensure that investment firms maintain adequate capital levels to safeguard the financial system and protect clients, especially for firms operating as part of larger groups.

The Republic of Cyprus is expected to secure a new loan in 2025 to repay the first instalment of a €6.3 billion loan received from the European Stability Mechanism (ESM).

This projection was shared by the Director of the Public Debt Management Office, Phaedon Kalozois, during a house finance committee meeting discussing the 2025 state budget.

The ESM had provided €6.3 billion out of a €10 billion financial package for Cyprus, as part of its economic bailout programme.

The Republic of Cyprus chose not to draw on the remaining €2.7 billion as it deemed that this would not be needed.

The Cypriot government and the Chinese CPP-Metron Consortium (CMC) have reached an agreement regarding the provision of a floating storage and re-gasification unit (FSRU) to the liquefied natural gas (LNG) terminal at Vasiliko, Energy Minister George Papanastasiou said on Tuesday.

Speaking to the House energy committee, he said the FSRU, named ‘Prometheus’ would now be delivered to Vasiliko within the next 60 days.

He said the agreement regarding the delivery of the FSRU was “financial”, and that as a result of the FSRU being delivered, the amount payable by CMC by way of guarantees had been reduced.

To this end, he clarified that the government had “not given any additional money” to CMC.

Hotel industry employees and trade unions on Tuesday rejected Labour Minister Yiannis Panayiotou’s mediation proposal for collective agreements, crushing hopes for a resolution to the ongoing dispute – a day after employers accepted it.

“After taking into account all of the problematic elements of the ministry’s proposal, the board has concluded it cannot be accepted by the workers, and as such has unanimously rejected it,” Peo said.

The hotel faction of trade union Peo said its board met on last Monday to dissect and discuss the mediation proposal.

The government will on October 30 announce two new schemes aimed at making housing in Cyprus more affordable, before beginning to implement both schemes within November, Interior Minister Constantinos Ioannou said.

The schemes in question are the ‘renovate-rent’ scheme and a grant of financial support to young people seeking to get onto the housing ladder.

The ‘renovate-rent’ scheme has been touted by the government for over a year, with Ioannou saying on Monday that it “seeks to contribute to the inclusion in the housing market of idle residential units for affordable rental”.

He added that the government hopes the grant for young people will “strengthen young people’s and young couples’ purchasing power for them to be able to buy a first home”.

The Cyprus Stock Exchange (CSE) ended Tuesday, October 22 with losses.

The general Cyprus Stock Market Index was at 197.20 points at 12:32 during the day, reflecting a decrease of 0.48 per cent over the previous day of trading.

The FTSE / CySE 20 Index was at 120.17 points, representing a drop of 0.50 per cent.

The total value of transactions came up to €215,484, until the aforementioned time during trading.

In terms of the sub-indexes, the main and investment firm indexes fell by 0.69 per cent and 2.25 per cent respectively. The hotel index rose by 0.13 per cent while the alternative index grew by a negligible 0.01 per cent.

The biggest investment interest was attracted by the Bank of Cyprus (no change), Demetra (-2.29 per cent), the Cyprus Cement Company (no change), KEO (no change), and Frou Frou Biscuits (no change).