Finance Minister Makis Keravnos reaffirmed the Government’s commitment to building “a more resilient economy, a fairer society and a more sustainable future” in his speech at AKEL’s 4th Economy Forum in Nicosia, titled “Strategy for the Future: Housing, Climate, Energy.”
Responding to criticism about the Government’s alleged inability to address the country’s challenges, he said the administration was working “in a coordinated and methodical manner” to turn difficulties into opportunities and to achieve “a more resilient economy, a fairer society, and a more sustainable future for all.”
Keravnos noted that the global and European economies are marked by turbulence and geopolitical risks but that, nevertheless, Cyprus’ economy “stands out for its resilience and prospects.”
He stressed that Cyprus is among the EU countries with the strongest fiscal performance, posting a high primary surplus of around 5% and that the economy is expected to maintain its growth trajectory, leading to a substantial reduction of public debt as a percentage of GDP, dropping below the 60% threshold by the end of 2025, a year earlier than the original 2026 target.
This “remarkable progress,” he added, is reflected in assessments by international rating agencies, as Cyprus has returned to the ‘A’ investment grade category after 13 years, with nine upgrades in the past two years.
According to the Minister, this “strong” economic foundation enables the implementation of social and development policies, including housing policy and the green transition.
A key element of the Government’s strategy is the ongoing tax reform, he said.
For households, the reform provides tax deductions for interest on first-home purchase loans, for energy upgrades of primary residences, and for the purchase of electric vehicles. For businesses, it includes increased capital allowances for energy-efficiency investments to help reduce operating costs.
On housing, Keravnos stressed that the issue is not unique to Cyprus but is a “European challenge.” He cited a recent EU study showing housing prices rose by 58.33% across the EU between 2015 and 2025, while the average European household spends 19.2% of its income on housing, according to 2024 data.
Cyprus and Italy recorded the lowest housing price increases in the past decade - 13.36% in Italy and 13.71% in Cyprus - yet, he noted, the need for affordable housing in Cyprus is “more pressing than ever.”
The Minister also said that the Government’s housing strategy is built on two pillars. The first focuses on increasing housing supply through planning incentives, the Build to Rent scheme, the Renovate and Rent scheme for unused properties, and funding through the Cyprus Land Development Corporation.
The second, aims to improve access to housing with targeted schemes for young people and families, special programmes for mountainous and rural areas, and faster digital procedures for permits.
The Minister said these programmes are expected to create more than 1,900 new units, many of which will enter the affordable-housing market.
On the green transition, Keravnos underlined that the climate and energy crisis “now shapes every aspect of development.” The Government, he said, is implementing a coherent plan for a green, clean and sustainable Cyprus, aligned with the European Green Deal and the 2050 climate-neutrality targets.
He noted that the National Energy and Climate Plan (NECP) includes €3.5 billion in projects - or €6.4 billion with EU co-funding. These include investments in RES, energy upgrades of homes and businesses, strengthening the circular economy, upgrading forest infrastructure and fire-protection systems, and the “Solar for All” and electromobility schemes.
The Minister also said they were placing importance on water infrastructure, with the budget share rising to 38% in 2026 from 32% in 2025, and €140 million allocated for water purchases from desalination - “the largest amount ever spent for this purpose.”
“We are implementing our commitment to continuous and uninterrupted desalination use, with a 32% increase in water supply thanks to the operation of seven new mobile desalination units introduced by the Christodoulides Government,” he added.
Keravnos also highlighted the need to balance environmental ambition with economic competitiveness. For this reason, he said, the EU Council of Ministers recently decided to postpone by one year the implementation of the new Emissions Trading System for buildings and road transport (ETS2), shifting the start date from 2027 to 2028.
Concluding, the Minister said the Government’s economic policy is “people-centred, balanced and prudent,” adding that “we do not have the right to burden future generations with additional debt or new memoranda.”
CNA/EAN/EPH/2025
ENDS, CYPRUS NEWS AGENCY
