By Loukas Liggis
- City Council Member, Ayia Napa Municipality
- Member of the Executive Board of NEDISY & Secretary of the School of Political Education
Inflation reached 3.5% in August. Transportation is 11.4% more expensive than last year, housing, water, and energy are up 6.9%, and food prices have risen 3.8%.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
While much of the pressure may stem from external factors, for the average citizen the result is the same. Higher prices for food, fuel, electricity, and rent are consuming an ever-larger portion of their paychecks.
Young people and families, in particular, while they work and contribute to the economy, find it difficult not only to save or invest, but often even to make ends meet. And here it is important to acknowledge one fact. The Cypriot economy has made significant progress. Growth remains strong, unemployment is at very low levels, and the fiscal situation has improved. We must not dismiss what has been achieved, but rather improve what needs improvement.
The next challenge is to translate the progress in macroeconomic indicators into prosperity for the real economy. We must move from managing the consequences to addressing the problems that directly affect people’s pockets.
Support must be available and targeted where it is truly needed. The lasting solution, however, must be an economy that allows more people to stand on their own two feet through work, home ownership, and financial independence.
And the problems we must address to achieve this are none other than housing, energy, and disposable income.
When it comes to housing, the basic solution is more homes. When supply is limited, continuously subsidizing demand can ultimately fuel price increases.
We need faster and simpler permitting processes, digitization, specific timelines, and targeted increases in building density where infrastructure permits.
At the same time, underutilized state-owned land can be developed in collaboration with the Municipal and Regional Development Agency (KOAG) and private developers to build affordable housing. We can also grant additional building density ratios to private developments in exchange for affordable housing, as well as provide more incentives to bring vacant homes back onto the market.
The goal is not to give young people larger subsidies to chase an increasingly expensive market. It is to increase the options available to them.
The same logic applies to energy. We need real competition, investments in production and storage, grid upgrades, and simpler energy retrofit programs for homes and businesses.
We also need natural gas to reduce production costs and end Cyprus’s energy isolation. The GSI can also contribute to this, provided its financial and technical viability is ensured. However, this is a topic in its own right, so I will not elaborate further.
The goal is not to help citizens pay for expensive electricity. It is to create the conditions for cheaper electricity.
Finally, disposable income. What matters is not just the nominal wage, but how much actually ends up in the worker’s pocket.
The 2026 tax reform is a step in the right direction. However, as long as public finances allow, we must continue to reduce the tax burden on labor, especially for the middle class and young families.
At the same time, stronger tax incentives are needed for investments in technology, equipment, digitization, and training. Higher productivity creates better jobs and the conditions for higher wages.
Growth, low unemployment, and fiscal stability are important. Now is the time to build on this foundation to make it easier to build a home, work, start a business, and raise a family in Cyprus.
Because the success of an economy is not judged solely by GDP and fiscal indicators.
It is judged by whether a working person can live with dignity, own a home, stand on their own two feet financially, raise a family, and feel that they have a future in their homeland.
