Cyprus is exhibiting remarkable resilience, with growth rates around 3%, unemployment at historically low levels, and a debt-to-GDP ratio close to the 60% threshold set by the Maastricht Treaty, the Governor of the Central Bank of Cyprus, Mr. Christodoulos Patsalides, said during the Economist’s 21st Annual Cyprus Summit.
In a discussion titled “Rethinking economic growth and banking in a fragmented world,” Mr. Patsalides highlighted three key factors contributing to the strong performance of the Cypriot economy: the diversification of the economy, consistent fiscal surpluses, and a robust banking sector, characterized by strong indices in terms of capital adequacy and liquidity, which rank among the highest in the Eurozone.
At the same time, the Governor emphasized that due to heightened uncertainty, primarily geopolitical uncertainty, Cyprus, as an open economy, should remain focused and vigilant.
Mr. Patsalides also referred to the resilience of the EU economy, with growth rates around 1%, noting that this rate is relatively low. He stressed that the Union should move forward with the completion of the Banking Union, the establishment of the Capital Markets Union, and initiatives such as the Savings and Investments Union, which would enhance its competitiveness.
Additionally, the Governor said he is encouraging mergers and acquisitions which could make the European banking sector more competitive.
Mr Patsalides also discussed topics such as high market valuations, particularly of large technology companies, and the digital euro, which he said could serve as the basis for the creation of secure currencies in the digital age.