Cyprus is set to terminate key cost-of-living support measures despite acknowledging ongoing financial pressures on households, Finance Minister Marios Keravnos announced.
The decision comes as the island reports a 4% economic growth rate and a 4% unemployment rate, which the government deems sufficient to discontinue current support schemes.
However, recent data from the Statistical Service paint a more complex picture of economic well-being among Cypriots. Approximately 13.9% of the population, or 127,236 individuals, were at risk of poverty in 2023, with an annual disposable income at or below €11,324.
The lower-income class comprises 28% of the population, while 64.1% fall within the middle-income bracket. Notably, 21.9% of those classified as middle-income belong to the lower middle-income category, with annual disposable incomes between €14,156 and €18,873.
The termination of support measures, including electricity subsidies and zero VAT on certain products, is expected to impact household budgets significantly. VAT will be reintroduced on essential items such as bread, milk, and hygiene products from 1 October.
Opposition parties have criticised the government’s decision, calling for more targeted and substantial measures to address the cost-of-living crisis, particularly for vulnerable groups and the middle class.
Despite ending these measures, Keravnos emphasised that the national budget allocates €1 billion for social benefits, including expanded nursery school and pre-primary education programmes.
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