According to a thorough market research conducted by CMRC Cypronetwork, three out of ten households in Cyprus are experiencing a decrease in their income. These findings were presented by Christos Michaelides, the executive president of the company, in a recent event held in Nicosia.

Mr. Michaelides highlighted that nearly four out of ten households anticipate a further deterioration of their financial situation in the next ten months, while one out of two expects a downward trend in Cyprus' economic prospects over the next six months.

Delving into the research findings, Mr. Michaelides cited that three out of ten households reported a decline in their income, whereas six out of ten noted no significant change, and one out of ten indicated an increase in their earnings.

Comparing the data to the previous year, there has been a reduction in the number of households reporting income decreases. However, four out of ten households still face a decline in their purchasing power, while two out of ten have seen improvement.

Furthermore, the research revealed that a significant majority, six out of ten households in particular, perceive their economic situation as difficult or even very difficult. Notably, the study also found that individuals are opting to minimize their travel to conserve fuel.

In terms of rising concerns, nine out of ten citizens expressed apprehension regarding increasing prices, particularly in relation to electricity costs. Additionally, the study shed light on the borrowing habits of Cypriot households, with four out of ten indicating loan obligations and three out of ten considering their families to be overly indebted.

The research further disclosed that two out of ten borrowers are uncertain about their ability to meet their financial obligations, while almost four out of ten households anticipate their financial situation to worsen in the coming months. Only one out of seven households expressed optimism about a potential improvement in their financial circumstances.

Moreover, according to Cypriots, the two most concerning issues in Cyprus today are price increases of goods and services, and energy price hikes (68% and 60%, respectively). In a second grouping, albeit with a significantly lower percentage, corruption is encountered (35%), along with poverty and social inequality (31%), income reduction (24%), and crime and violence (21%). On the contrary, unemployment stands at 17%, high taxation at 13%, insecurity due to the Russian invasion at 10%, the COVID-19 pandemic at 8%, and climate change at 7%.

In 2023, the percentage of households facing survival issues is only 1%, significantly reduced compared to 2021 (12%). Those who find it somewhat or quite difficult to manage with their income remain relatively stable at 19% and 15%, respectively.

Furthermore, according to the survey, eight out of ten consumers reported increased expenses in 2023 (81%), while six out of ten have reduced their expenses on entertainment and vacation compared to the past (58% and 60%, respectively).

An equally significant proportion of consumers mentioned reduced expenses on their clothing and footwear purchases, as well as on branded consumer products in supermarkets.

Lastly, the findings regarding potential purchases such as homes, furniture, appliances, or cars, as well as technology products or home renovations are also noteworthy, since the overwhelming consumer majority responded negatively, indicating that they will not engage in such expenses.  

High inflation and rising prices were the results of the successive challenges that Europe and the world face in recent years. The pandemic prompted widespread lockdowns, disrupting global production and distribution networks, causing shortages and higher transportation costs. In addition, the Russian aggression in Ukraine created geopolitical tensions, impacting energy markets and increasing fuel prices. Simultaneously, the energy crisis, compounded by the war and thus, the reduced production, heightened costs further, while supply chain disruptions hindered the flow of goods, leading to scarcity and escalating prices in essential commodities, exacerbating the economic challenges faced by individuals and businesses alike.