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Government announced €103m financial support package to offset rising prices

30/05/2022 09:03

Cyprus’ government announced a new package of financial support for vulnerable groups of the population, to the tune of €103 million on Friday, to offset the impact of inflation and the war in Ukraine. The support package, which follows, another one for the consequences of the pandemic, amounting to €192 million, was approved on Friday by the Council of Ministers.

In statements after the Cabinet meeting, Finance Minister Constantinos Petrides said that, after the pandemic, the country has entered a period of inflation, primarily due to external factors and the war in Ukraine.

He noted that no government can kill inflation at its root, as rising liquidity in the market may give rise to inflationary pressures, leading to a vicious cycle of price rises.

He said that the government, "in a sensible and careful manner", will try to help those in need in a way that will not upset fiscal stability. He added that “we are also entering an era in which interest rates will rise, which includes an increase in the cost of borrowing and debt service by the state itself.”

The Minister said that this new package of 11 support measures aims to help vulnerable groups of the population, such as pensioners, low-income households with children under 18, large families, beneficiaries of the Guaranteed Minimum Income allowance, but also livestock farmers and producers of crops.

He also said that the measures, among other things, concern subsidies for the services of caregivers for young children, for kindergarten fees, for the installation of photovoltaics in homes and roof insulations, and simplified procedures for applications for obtaining a licence for the installation of Renewable Energy Systems.

The Minister also announced that the measure for the reduction of VAT a regards electricity, as well as the measures already in place for VAT on petrol and heating fuel, will be extended until the end of August.

He said that the Cabinet also discussed issues such as increasing inspections to stamp out profiteering.