In a recent announcement, Minister of Finance Makis Keravnos confirmed that employees in Cyprus who are entitled to the Cost of Living Allowance (CoLA) will see a 2.44 percent increase in their wages starting this month. This adjustment, applicable to both public and private sectors, is part of the government’s mechanism to align wages with the consumer price index (CPI).
The wage increase is set to remain in effect until the end of the current year. It comes as a response to the inflation rate, which has seen a decline from the steep 8.4 percent at the end of 2022 to a more moderate 3.5 percent in 2023, according to data from the state’s Statistics Department.
This development follows a series of negotiations between unions and the government, which led to an increase in CoLA payouts from 50 percent to 66.7 percent during the summer. As a result, the wage increase is slightly below the current cost-of-living index rise of 3.5 percent.
StatWatch data indicates a notable decrease in the CPI, which dropped to 1.6 percent in December from 1.7 percent in November, marking a significant reduction from the 7.9 percent recorded in December of the previous year. The overall CPI increase for 2023 stands at 3.5 percent, compared to the previous year’s 8.4 percent, suggesting that inflation rates are being progressively reined in.
Among the various categories affected by price changes, petroleum products experienced a decline of 7.2 percent and 5.3 percent in November and December 2023 respectively. Meanwhile, the restaurants and hotels category witnessed the most significant change, with a rise of 5.4 percent compared to December 2022 and the preceding month.
The wage increase is a welcome relief for workers facing the challenges of inflation and reflects the government’s commitment to maintaining purchasing power amidst fluctuating economic conditions.
