Cyprus’ Ministry of Finance reviews AI use in economic policy and progress on AI Act implementation

Cyprus’ Ministry of Finance published the finance minister’s annual lecture at the University of Cyprus, reviewing how artificial intelligence (AI) could improve economic forecasting, tax administration and public spending, alongside progress on implementing the European Union’s Artificial Intelligence Act. The national legislative framework is being finalized, while a bill already put out for public consultation proposes central bank oversight of certain AI systems used by financial institutions. AI could enable earlier detection of changes in economic activity through high-frequency data and help target tax and customs checks, reducing unnecessary burdens on compliant taxpayers. Potential spending applications include detecting unusual procurement patterns, assessing the targeting of social programs and evaluating policy outcomes. These uses require reliable data, digital infrastructure, workforce training and clear governance. The lecture also emphasized reskilling and support for workers moving from shrinking occupations into expanding activities, rather than treating exposure to AI as equivalent to job losses. Under the consultation bill, the Central Bank of Cyprus would act as market surveillance authority for AI systems classified as high risk where their use is directly linked to financial services under its supervisory remit. Existing designations give the Deputy Ministry of Research, Innovation and Digital Policy the overarching coordinating role and the Commissioner of Communications responsibility for notification, market surveillance and the single point of contact. The Commissioner for Personal Data Protection oversees specified categories of AI systems classified as high risk. An independent study supporting national implementation is due to be completed within days, examining operating arrangements, staffing, expertise and technical infrastructure needs.