Georgiades presents reform-driven 2019 budget
Finance Minister Harris Georgiades urged the parliamentary parties to support the government’s reform programme as expressed through the 2019 budget plan.
Georgiades was addressing MPs during Friday’s presentation of the government’s budget plan for 2019.
The Finance Minister outlined key policy directions and stressed that reforms and changes in state structures and processes should be a national goal.
These include reforms in the justice system, the implementation of the NHS, public service reforms, educational reforms, the implementation of the tourism strategy through the creation of the competent deputy ministry, the simplification of the project licensing process on the basis of a new investment law, improving governance in the field of research and innovation, which includes an ongoing initiative in blockchain technology.
He also referred to the government’s goal to support the growth of private universities, the implementation of the state’s energy policy, the establishment of a new independent supervisory authority for the insurance sector and the provident funds sector and the reform of the Central Bank.
Georgiades also referred to privatisation plans, which include the partial privatisation of Cyta, the Cyprus Stock Exchange and the state lottery.
He reaffirmed the government’s commitment to adhering to the fiscal policy it has been following throughout the years in the framework of EU guidelines.
Referring to the Cypriot economy as it stands, he said that 2018 is the fourth year of economic recovery with an average growth rate of 4% since 2015.
“We must not forget the long period of recession that preceded, when the GDP had shrunk by 11% and the inequality gaps had broadened, and unemployment was on the rise”.
The minister said the unemployment rate has dropped to 7% and equality indices are improving.
Georgiades added that the encouraging interest exhibited by investors led the government to “estimate that the positive growth rates are to continue in a medium to long term horizon”.
On the impact of NPLs, Georgiades said that laws passed in July, offered stability to the country and convinced the International rating agencies to upgrade the country’s creditworthiness.
With regards to the banking sector, the Finance Minister noted that the adoption of the new legislative framework has allowed the sector to progress.
He said that the creation of the new NPL management body and the packaging and sale of non-performing loans has helped the banks to reduce their NPE from EUR 28 bln to EUR 11 bln.
Referring to ESTIA scheme for mortgage defaulters, he said that it is a tool which will help the banking system to reduce its bad loans even further.
The budget includes a “rational increase” in spending by EUR 250 mln, with total expenditure reaching EUR 7.9 bln, while revenues are estimated at EUR 8.55 bln.
Georgiades said there is room for support measures for those in need, as well as the promotion of tax incentives and cuts, while stressing that margins are not unlimited.