Economist Yiannis Telonis has warned that the ongoing geopolitical crisis in the Middle East could place pressure on the Cyprus economy, particularly through rising fuel prices and potential impacts on the island’s tourism sector.
Speaking on the Sigma TV programme “Mesimeri kai Kati”, Telonis said the situation remains highly uncertain, with the scale of the impact depending largely on how long the crisis continues.
“We have unfortunately entered the fog of war as well. The fog of war has extended into our region, so any estimates are made under these uncertain conditions,” he said.
Duration of crisis key factor
Telonis stressed that the duration of the crisis will determine how strongly the Cyprus economy feels the effects.
If tensions ease quickly, the consequences may remain limited. However, a prolonged crisis could lead to more serious economic pressures.
He added that the next few weeks will prove crucial in determining whether the regional instability will begin to influence economic activity on the island.
Rising fuel prices raise concern
Telonis highlighted growing concern over refined petroleum products, which directly affect the Cyprus economy.
“We distinguish between crude oil prices and refined products. What matters to us are the refined products, particularly diesel and jet fuel,” he explained.
According to Telonis, prices for both products have already risen sharply.
“Unfortunately, both have increased by more than 100%. Their prices have effectively doubled,” he said, warning that the increase could bring new inflationary pressures to the Cyprus economy.
Tourism sector could face pressure
Telonis also warned that rising jet fuel prices could increase the cost of holiday packages, affecting Cyprus’ tourism competitiveness.
“This means our tourism package will become more expensive. Either the tourism industry absorbs the increase, or the final product becomes more costly,” he said.
If prices rise while the region appears unstable, tourist flows could decline.
He noted that the real impact may become visible within the next two to three months, a period that coincides with the start of the summer tourism season.
“If this crisis lasts beyond four to five weeks, then we will see some impact on Cyprus,” he said.
Warning over possible profiteering
Telonis also urged vigilance regarding fuel prices, warning that any immediate increases may not reflect actual market conditions.
“At the moment, I cannot justify price increases this week. We have not yet received shipments with higher prices or increased insurance costs,” he said.
If prices rise immediately, he suggested the increases could result from speculative behaviour.
“We as consumers must remain alert. If we see price increases, we should go to another fuel station,” he said, noting that similar profiteering cases have already appeared in parts of Europe and the United States.
Trade impact not yet visible
Regarding trade, Telonis said it is still too early to see disruptions in supply chains.
Cyprus does not depend directly on the Suez Canal, which remains one of the major concerns for global trade during periods of regional instability.
However, he stressed that protecting Cyprus’ tourism sector remains a priority, as flight cancellations and security concerns could quickly affect visitor arrivals.
“Flight cancellations mean we lose arrival seats to Cyprus,” he said.
Possible ECB response
Telonis also referred to a potential reaction from the European Central Bank if inflationary pressures intensify.
“If inflation enters the economic chain, I believe the ECB will act quickly this time,” he said.
However, he clarified that such a move would not be immediate and could emerge later in the summer if the crisis continues.
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