Philenews

Cyprus Fiscal Council Warns of Investment Outflow Risk

Published January 12, 2026, 14:20
Cyprus Fiscal Council Warns of Investment Outflow Risk

The President of the Cyprus Fiscal Council (CFC), Michalis Persianis, emphasized the need for a substantial connection between foreign businesses and the Cypriot economy and society, warning of the risk of investment outflow. This connection is essential to ensure that the benefits of foreign direct investment remain in Cyprus. Mr. Persianis stated that growth and exports are mainly driven by foreign high-tech companies. He also noted that wage growth is weak and that there is inequality in their distribution. He proposed adopting a model similar to that of Ireland, where foreign investment is organically linked to the local economy. He pointed out that Cyprus should take advantage of the opportunity presented by the war in Ukraine to persuade companies that have settled in Cyprus due to the war to stay and expand. Finally, Mr. Persianis referred to the increase in state debt to the Social Insurance Fund, describing it as a fiscal problem, as government funding from the Fund’s surpluses hides its deficit balance.