Cyprus’ Ministry of Finance reviewed how artificial intelligence (AI) could improve economic policymaking and outlined progress on implementing the European Union’s AI Act in the annual finance minister’s lecture at the University of Cyprus. The address focused on economic forecasting, fiscal management and the adjustments needed to manage AI’s effects on employment. It also reviewed proposed Central Bank of Cyprus oversight of certain financial AI systems as the national legislative framework nears completion. Potential public sector applications include using frequently updated data to identify economic changes earlier and targeting tax and customs checks through better risk analysis, rather than indiscriminately increasing inspections. AI could also help identify unusual procurement patterns and assess whether social spending reaches its intended recipients. These applications require reliable data, digital infrastructure, trained staff and clear governance. The address also stressed retraining and support for workers changing occupations. An International Monetary Fund estimate that about 60% of workers in advanced European economies hold occupations highly exposed to AI does not imply equivalent job losses, since exposure includes opportunities to improve productivity. A draft implementation bill previously put to public consultation proposes making the Central Bank of Cyprus the market surveillance authority for high risk AI systems used by financial institutions where those systems directly support financial services under its supervisory remit. Competent authorities have already been designated and are developing procedures to exercise their responsibilities. An independent technical and economic study nearing completion is assessing the operating arrangements, staffing and technical resources needed to implement the framework.

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