President Nikos Christodoulides announced a new package of economic support measures Thursday, saying Cyprus must remain prepared for prolonged regional instability and its impact on households.
In a televised address, Christodoulides said recent geopolitical tensions underscored the need to safeguard public security and maintain economic resilience.
He credited support from Greece, France, Italy, Spain and the Netherlands for strengthening Cyprus’ deterrence capabilities, and said the government’s fiscal discipline had left the economy strong enough to intervene.
“High growth, a significant budget surplus, limited public debt and low inflation allow us to manage the impact of regional developments,” he said.
Christodoulides said the government has acted “with responsibility and planning” both in foreign‑policy initiatives and in domestic support, citing existing subsidies on electricity for vulnerable consumers, reduced VAT on power bills and zero VAT on basic goods.
He warned that while international efforts may lead to de‑escalation, Cyprus must also plan for the possibility of a longer crisis. The new measures, he said, are targeted, temporary and fiscally sustainable.
The package includes:
• A reduced VAT rate of 5% on electricity for all households from May 1, 2026, through March 31, 2027.
• A cut of 8.33 cents per liter in the excise tax on motor fuel from April through June 2026.
• Zero VAT on meat, poultry and fish from April 1 through Sept. 30, 2026, adding them to the existing list of zero‑rated fruits and vegetables.
• Suspension of the planned Green Tax on fuel, which would have added 9 cents per liter. • A 30% wage subsidy for hotel workers in units operating from April 1 to April 30, 2026.
• Additional support for airlines to maintain connectivity with key tourism markets.
• A 15% subsidy for farmers on fertilizer purchases in April and May.
• A 15% subsidy for farmers on agricultural supplies during the same period.
The total cost of the measures, including those already in force, exceeds €200 million, the president said, adding that all are fully costed and within the government’s fiscal surplus.
Christodoulides said the government will continue monitoring the market and warned that profiteering will not be tolerated. Regulators have been instructed to intensify inspections.
“Prudent fiscal policy is not theoretical,” he said. “It is a shield that allows us to intervene when needed without jeopardizing economic stability.”
He said the government remains committed to supporting households and businesses “with planning, responsibility and consistency,” while strengthening the country’s resilience amid uncertainty.
