Parliamentary Committee report on state budget 2022 sees significant uncertainties due to pandemic

A report by the Parliamentary Committee of Financial and Budgetary Affairs on the State Budget for 2022 ahead of the plenary debate and vote this week, stresses the significant uncertainties affecting the projections upon which the budget is based on.

The uncertain but positive long-term economic prospects and the necessity for sustainable economic growth and the correct implementation of the Recovery and Resilience Plan, are also noted in the report.

According to the Committee’s conclusions, the Cypriot economy, much like the European and the world economies, continues to depend to a great extent on the course the COVID-19 will follow. It is the wish of all sides that the impact of the health crisis on the Cypriot economy be smoothed as soon as possible and that it returns on a course of sustainable growth.

The report further says that based on the government’s projections medium-term prospects are positive despite being characterized by uncertainty.

It is also noted that the economy’s sustainable growth, reducing public debt to sustainable levels, achieving a fiscal surplus, protecting the standard of living of consumers from possible inflationary pressures and in general guaranteeing citizens, prosperity should be included in the government’s key priorities.

Promoting green growth, digital transformation, research and innovation, rational and substantive management of NPLs, implementing structural reforms on the correct basis, as well as implementing important development projects, will contribute to the economy’s recovery and growth in the medium and long term, the report adds.

Referring to the Recovery and Resilience National Plan, it says for its rational and best possible implementation, making the most of European tools included in the Cohesion Policy Programme 2021 – 2027 and the funding tools of the European Investments Fund will contribute to supporting employment, enhancing entrepreneurship and therefore economic growth.

All Committee members acknowledge the unprecedented and particular conditions the Cypriot economy has been facing since 2020 due to COVID-19 as well as its impact on public finances and the real economy. They also acknowledge the uncertainty which characterizes the projections upon which the state budget for 2022 is based on due to a possible new flare-up of the pandemic.