Cyprus Economy and Competitiveness Council (Ecompet) on Friday outlined a set of medium-term and long-term proposals to tackle inflation.
The Council also announced that due to the seriousness of inflation it established a committee to propose a series of measures and policy directives aiming to tackle inflation both on a medium-term and long-term horizon.
“Inflation is one of the most significant challenges facing all EU member-states, including Cyprus,” the Council said.
The Council’s proposals complement the short-term measures taken by the government as well as by the EU and are in-line with the National Recovery and Resilience Plan and the long-term strategy for sustainable growth of Cyprus entitled “Vision 2035.”
Inflation has multiple adverse aspects, such as weakening citizens’ purchasing power, increasing interest rates and slowing down economic growth, the Council said, adding that these problems highlight even more the need for changes and the implementation measures.
The Council proposes improving productivity through digital transformation and innovation, recalling that the Recovery Plan includes an array of digital transformation medium-term and long-term measures that aim in investing in innovation and boosting productivity.
Digitisation, the Council added, will reduce the need for transportation to address services physically as well the imposition of additional fees, while improving broadband connection will enable a more innovative environment that would reduce operating costs as well as improve household costs via work from home solutions.
On the improvement of supply chains and boosting Cyprus connectivity, Ecompet proposed the that the Ministry of Commerce’s Trade Service should be strengthened to promote exports, the digitisation of services and utilise new technologies in agriculture.
The Council also pointed out that upgrading ports and airports with new technologies and their promotion as regional hubs would improve supply chains and reduce transport costs.
Furthermore, the Council highlighted cheaper energy sources, circular economy and energy efficiency.
The upgrade of the electricity market, interconnections with other countries and the use of cheaper energy sources will gradually reduce the electricity bills, it said.
According to the Council, promoting a circular economy will reduce the excessive consumption trends and use of raw materials resulting to reduced production costs and an overall reduced final cost for consumers.
The state should also upgrade energy efficiency for buildings, promote affordable housing and other measures to support vulnerable households, Ecompet added.
Moreover, the Council recommended the promotion of cheap and efficient means of mass transportation, recalling that the “Vision 2035” suggests a change in culture over using mass transportation.
To this end, the Council suggested increasing the frequency in bus routes for universities and schools and providing economic incentives to certain groups, such as university students and pupils, to use mass transportation.
The Council said that an updated study on the use of tram buses in Nicosia and Limassol and train connecting cities. A study carried out in the past has rendered such projects as not sustainable.
“These projects in the future could constitute efficient means of mass transportation when crucial parameters change,” the Council said.