Dialogos

Foreign Investments Without Footprint: Growth That Doesn't Reach Society

Published January 13, 2026, 06:05
Foreign Investments Without Footprint: Growth That Doesn't Reach Society

The President of the Fiscal Council, Michalis Persianis, stressed the need for foreign investments in Cyprus to be substantially linked to the domestic economy and society, in order to ensure their benefits and avoid a mass outflow. Growth and exports are mainly driven by foreign-controlled high-tech companies, limiting the diffusion of benefits to society. During the discussion at the House Finance Committee, the increasing debt of the state to the Social Insurance Fund was mentioned, which is increasing by approximately €1 billion annually. Mr. Persianis characterised this as a fiscal problem of the Central Government, rather than a problem of the Fund. It was also pointed out that there is a lack of incentives for fiscal discipline, with resources that could be directed to productive investments ending up in spending without social benefit. The share of wages in GDP increased less than the increase in GDP, indicating lower and more unequal wage increases. The budget of the Fiscal Council for 2026 amounts to €944,263 and includes deficits due to increased expenditure.