Disy calls for urgent economic plan but warns against pre-election populism

Opposition party Disy on Monday called for an emergency and holistic plan to address the economic impact of the Middle East crisis, warning that inaction is not an option amid rising uncertainty.

The party issued a statement emphasising that the government should provide specific aid to essential areas of the economy, such as households, the tourism industry, investment projects, farming, and those at risk.

“Measures that support consumers, vulnerable groups, tourism, investment and the primary sector,” the party said.

“The short-term effects may have long-term consequences,” it added.

Moreover, Disy stressed that immediate and coordinated action is required to mitigate the risks stemming from the evolving regional situation.

At the same time, the party said it is closely monitoring developments on a daily basis and analysing all possible scenarios, having already submitted proposals.

It also stated that it remains ready to contribute constructively to the management of the situation.

“Due to the high level of uncertainty, we stress the need to maintain fiscal space that ensures economic stability,” the party said.

The announcement further underlined the importance of preserving fiscal discipline to safeguard economic resilience during a period of heightened volatility.

“We also stress the need for prudence and seriousness from all political forces,” the party said.

“Populist policies should be set aside due to elections,” it added.

Relatedly, the Cyprus Fiscal Council last week warned that the ongoing conflict in Iran is likely to exert significant pressure on the national economy, urging the government to prepare for immediate fallout.

The council highlighted that risks are spreading across all sectors, with widespread inflationary pressures expected to affect not just fuel, but also commodities, fertilisers, and supply chains.

Despite these challenges, the council explained that Cyprus’ improved fiscal position and reduced public debt provide the government with the capacity to respond effectively.

However, it strongly advised against blanket support measures.

Instead, the council recommended strictly temporary, targeted interventions aimed at low-income households and small-to-medium enterprises to protect employment and sustain growth.

The council further stressed that any aid should be based on clear, measurable objectives to allow for future adjustments.

It also argued that certain sectors, which previously saw high price increases due to peak demand, should be left to adjust naturally to the expected market slowdown without state intervention.