By Andria Kades
Cyprus’ economy is beginning to recover, the House finance committee said on Monday after reviewing a draft report of the state budget for 2016.
The 131 page document – still lacking official party positions – was reviewed behind closed doors.
The document said the banking system has stabilised while Cyprus now has access to international capital markets. While credit ratings for the island have improved, the report also outlines several interior challenges that need to be faced such as high unemployment levels, risks of poverty and social exclusion, high numbers of non performing loans and the need to implement reforms in the health sector, local governance, public administration, pensions and ensuring macroeconomic stability.
This is the last state budget that will be voted for in parliament under the conditions of the financial support programme Cyprus signed with its international creditors in 2013.
Set to head to the house this week, deputies said Cyprus could be exiting the memorandum in 2016 and the economy began to show the first signs of recovery this year, after four consecutive years of recession.
Chairman of the committee Nicolas Papadopoulos said he submitted 27 amendments to the budget while Greens’ MP Giorgos Perdikis said he would be submitting proposals on slashing officials’ allowances for drivers and phone bills amongst many others. AKEL said they would be voting against the budget.
Outlining that public debt had become sustainable, deputies said public expenditure funds that had increased by five per cent – an amount they described as marginal.
While the report outlines more efforts need to be exerted to attract foreign investments, the committee noted there were delays in pushing for reforms that could contribute to boosting the economy’s competitiveness, stressing the need to create a new development model the country should adhere to.