Cyprus economy to maintain growth despite regional challenges, President says

Cyprus will maintain one of the highest economic growth rates in Europe despite regional instability and financial oversight imposed on major European economies, President Nikos Christodoulides has said, presenting the government’s 2025 Annual Programme.

Speaking on the evening of 29 January, he underlined the resilience of the Cypriot economy and its ability to sustain momentum.

President Christodoulides outlined the initiatives taken to drive economic growth, including the implementation of the Primary Sector Development Strategy and the launch of public consultations on Tax Reform in February, aiming to increase disposable income for households and boost business growth.

According to the President, the government’s Tax Reform Strategy will reduce corporate tax burdens, aiming to enhance competitiveness and export growth. Measures will also facilitate Cyprus’ green and digital transition, strengthen its investment attractiveness, and combat tax evasion.

The launch of a Business Support Centre will streamline licensing and offer tailored assistance to investors, expediting strategic development projects.

Additionally, the President of the Republic said that in 2025, the Pension Reform will be launched, with the primary objective of ensuring sustainable and dignified pensions. The government will also initiate the long-awaited compensation payments for depositors and bondholders affected by the 2013 financial crisis.

The President said that for the first time since 2009, Cyprus was projected to achieve full employment, with unemployment rate falling below 5%. Wage growth and job security are expected to improve, while new employment integration schemes will help recipients of Minimum Guaranteed Income enter the workforce. Furthermore, the government plans to launch an initiative to repatriate Cypriot scientists, offering incentives for their return.

Housing and refugee policy

To address housing challenges, the government will allocate over €75 million, expanding schemes such as the New Land Allocation Programme and subsidies for young buyers under 41 years old.

The refugee housing policy will also have a 20% increase in grants for home acquisition in rural and disadvantaged areas.

Tourism and Maritime Sector Expansion

The President pointed out that the Cypriot tourism sector saw record-breaking figures in 2024, with over 4 million visitors and revenues exceeding €3 billion. In 2025, the government will introduce incentives for themed tourism parks and initiate the tender process for the Paphos Marina project.

At the same time, he said that, in collaboration with local authorities and the private sector, "we are proceeding with targeted actions to upgrade specific tourist destinations in our country."

The President also said that the maritime sector, a key pillar of the economy, has recorded an 18% increase in ship registrations over the past 16 months. To further capitalise on this momentum, the government will promote maritime-related digital services and yacht industry growth.

Key reforms in the Audit and Law Office

Key reforms in the Audit and Law Office of the Republic and the Central Bank, the creation of medical care emergency units, timely payment of Social Insurance Benefits, and the expansion of child benefits eligibility are among the actions announced by Christodoulides.

The President noted that 2025 is a milestone year for the implementation of two emblematic institutional reforms: the modernisation of the Law Office and Audit Service. “We are implementing two bold reforms that modernise our state”, he said, adding that in the same context, the reform of the governance of the Central Bank is underway, following the example of other central banks in the euro system.

Regarding the governance of Semi-Government Organisations, the President announced plans to strengthen them by upgrading service quality, fiscal management, and investment policy, with particular emphasis on organisations engaged in commercial activity.

He also announced the establishment of a Long-Term Planning Unit, which, in collaboration with the academic community and the private sector, will operate as a Strategic Analysis and Forecasting Center, identifying future challenges and opportunities through the study of global trends and technological changes.

Resilient and effective General Health System

The President noted that the health sector holds a dominant position, with an emphasis on prevention and the equal and uninterrupted provision of quality health services through a resilient and effective General Health System.

As he said, achieving this goal requires the optimal functioning of public hospitals and their financial and administrative autonomy. In this context, a developmental program is being implemented for the modernisation of public hospitals in all districts, focusing on the Emergency Departments, with projects worth €128 million.

Specifically, regarding the challenges faced by the Emergency Departments, the President announced the commencement of preparatory work for the creation of medical care emergency units, which will treat cases that require immediate but not urgent care, aiming to easing the workload the Emergency Departments have on a daily base.

Regarding more effective management of resources, President Christodoulides spoke about the utilisation of technology and strengthening on-site inspections, through the enhanced role of the Ministry of Health. As part of this effort, significant steps include the creation of the National Clinical Documentation Center and the appointment of the Patient’s Advocate.

Additionally, he said that in 2025, the creation of the National Cancer Institute would proceed, and the National Prevention Strategy would be implemented through the expansion of population screening programs for prostate, cervical, and colorectal cancer, as well as for the early diagnosis of autism spectrum disorders in children.

At the same time, the construction of a new, state-of-the-art Pediatric Oncology Clinic will begin, costing over €8.5 million, which will significantly enhance the services provided.

Social Insurance Benefits Paid Within 30 Days

As part of modernising the social benefits policy, President Christodoulides announced the expansion of eligibility for child benefits, covering the entire middle class. With this measure, an additional 16,000 children will automatically benefit from the Tuition and Child Feeding Subsidy Scheme, covering up to 80% of daycare tuition fees.

Also, special legislation will be advanced for issues concerning individuals with disabilities. Specifically, the President announced the disconnection of disability benefits from the Minimum Guaranteed Income, resulting in an increase in beneficiaries and benefits, fulfilling, as he said, a long-standing and just demand of the people with disabilities.

As part of the policy for the elderly, the President referred to the Home Support Program for the Elderly. “This is an important action that promotes intergenerational coexistence and interaction through a structured program within the social contribution framework of universities”, he said.

As part of the digital transformation, the President announced that, as of March, all Social Insurance Department benefits will be paid within 30 days.

2025 dedicated to the Digital Transformation of Cyprus

The year 2025 will be dedicated to the Digital Transformation of the country, President of the Republic Nikos Christodoulides said, adding that the aim is to reduce bureaucracy, strengthen the competitiveness of the economy and promote transparency.

President Christodoulides said that the government will proceed with the introduction of 60 new electronic services, such as, application for student sponsorship, re-issuance of refugee identity cards, electronic registration of an employer, application for employment of third-country nationals, application for renewal of temporary residence permits for employees of foreign-owned companies and domestic workers and the electronic registration of children in schools at all levels.

The President said that the “Digital Citizen” and "Digital Assistance" platforms will be enhanced with more services.

"We proceed with a plan for the development of innovative Artificial Intelligence solutions to address challenges in the public sector, while providing opportunities for innovative businesses and research institutions to develop solutions," he pointed out.

The President also referred to urban planning permits, recalling that as from October 2, 2024, urban planning permits for up to two residences are now issued in 20 days. He announced that from February 1, building permits will also be issued in 20 days and as a result all permits for up to two residences will now be issued in 40 days.

He also announced that in March, the fast and automatic licensing system will be extended to medium-scale developments, such as apartment buildings with up to 20 apartments, with the automatic issuance of urban planning and building permits within 80 days.

He said that within the framework of the Digital Transformation, from March, all social benefits of the Department of Social Insurance will be paid within 30 days.

"The transformation of the state, through the promotion of bold reforms, is the best way to upgrade the relationship between the citizens and the state. We want our country to be a modern state, efficient, with credibility and dignity both internally and internationally," he concluded. 

Strengthening Cyprus' defence capabilities

The challenges in the region and the ongoing Turkish occupation make it even more imperative to strengthen Cyprus’ security, defence capabilities, and deterrent power, President Nikos Christodoulides stated.

To this end, he said that Cyprus was proceeding with the upgrade of the ‘Andreas Papandreou’ Air Base and the expansion of the ‘Evangelos Florakis’ Naval Base. He also highlighted plans to promote voluntary military service for women and the utilization of retired officers.

At the same time, the President emphasized efforts to integrate Cyprus into the Schengen Zone and complete its inclusion in the US Visa Waiver Program.

“Our vision for Defence and Security includes the ambitious yet achievable goal of transforming Cyprus into a producer of cutting-edge defence systems. To this end, we are instituting Defence Industrial Cooperation Programs involving Cypriot companies in arms procurement contracts,” the President said.

He  also expressed pride that, despite its small size, Cyprus is strengthening its international footprint and elevating its global standing.

“Our foreign policy direction is clear and unwavering. Free from ideological constraints of the past, we are building an outward-looking Cyprus that takes initiatives and establishes strategic partnerships on a regional, European, and global level,” he noted.

He cited as examples the AMALTHIA initiative, strategic dialogues with the United States and the United Kingdom, partnerships with EU member states and neighbouring countries, and the recent US Presidential Declaration.

Internal security as a key priority

The President also stressed that strengthening domestic security remained a primary objective.

He pledged that in 2025 improvements will be made to the police response system for emergency calls, and enhanced methods for information-sharing and coordination in police operations will be introduced. To better manage critical incidents, 24/7 operational support for police departments will be reinforced through the establishment of a Nationwide Operational Officers’ Task Force, he added.

Additionally, the government will introduce legislative measures to combat sports-related violence and regulate fan clubs to address hooliganism, he said.

Looking forward to meetings on Cyprus issue

Christodoulides, has assured that he will do his utmost to fully utilise the upcoming extended meeting on the Cyprus issue that will be held under the auspices of the UN Secretary-General, Antonio Guterres and is expected to take place in March.

In this context, he said, he looks forward to his meeting on 10 February with the UN Under Secretary-General, Rosemary DiCarlo.

Referring to the Cyprus issue during the presentation of the s government’s annual programme for 2025 at the Presidential Palace, the President said that since the first day he assumed his duties, he has been working on the basis of a specific plan to lift the impasse in the Cyprus issue.

"The current state of affairs can not be the future of our country. With a clear political will that is recognized by all, we have managed to activate the international interest and create conditions for mobility towards the resumption of talks," he said.

He noted that "by utilising our status as a member state of the European Union, we have achieved a clear interconnection of the EU-Turkey issues with developments in the Cyprus problem, creating the conditions for a sustainable and functional solution, based on the agreed framework and European principles and values, through a mutually beneficial state of affairs".

"I would like to reiterate that I will do everything possible so that we fully utilise the upcoming expanded meeting under the auspices of the UN Secretary-General, which is expected to be held next March. In this context, I also look forward to my meeting on February 10 with Deputy Secretary-General of the United Nations, Mrs DiCarlo, who will come to our country" he concluded.

Addressing climate change

On climate change, the President announced plans to enact a climate law aimed at reducing Cyprus' carbon footprint and adapting to climate change.

To enhance fire protection, he said that the government has secured at least 11 aerial firefighting units for the upcoming fire season, including the acquisition of three state-owned aircraft. Additionally, fire detection systems will be installed in 12 industrial zones and critical infrastructure sites across the island.

To modernize the civil protection system, more shelters will be made available in 2025, alongside the launch of an electronic application to help residents locate the nearest shelter.

The President outlined immediate actions to address water shortages, including the installation of mobile desalination units, upgrades to irrigation infrastructure, and the drilling of new wells.

Infrastructure upgrades in the framework of Cyprus' migration policy

Cyprus is set to complete infrastructure upgrades in the framework of its migration policy during this year, Christodoulides also announced. He expressed satisfaction with the country’s immigration policy, emphasising that the results confirm the effectiveness of the government’s policy.

“For the first time in 2024, repatriations exceeded arrivals of irregular migrants, with the ratio reaching 170%, making our country the leader in returns,” the President said. He also noted that arrivals had decreased by 70% compared to 2022.

The President pointed out his government's commitment to an effective migration strategy, stressing that the completion of infrastructure upgrades will enhance implementation. These upgrades include the modernisation of the Pournara First Reception Center and the construction of a new Reception and Pre-Departure Center in the ‘Limnes’ area.

Regarding the integration of legal migrants into the Cypriot economy, he announced the formulation and implementation of a strategy for their integration in collaboration with international organisations.

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(Sources: CNA/PIO)