the area of payments, amending the payment services directive, and also proposing a new payment services regulation. these developments are important to strengthen further the resilience of supervised entities, combat and mitigate payment fraud and level the playing field between banks and nonbanks. furthermore, the enactment of the digital operational resilience act ( dora ) of the european union earlier this year, is a critical milestone and accomplishment. the european banking authority and the other european supervisory authorities, have a critical role to play in its smooth implementation. dora introduces advanced ict risk management requirements, threat - led penetration testing and, importantly, oversight of third party providers, including bigtechs. 2 / 3 bis - central bankers'speeches going forward, legislators and supervisors need to ensure that the existing and prospective legal framework does not leave significant room for undetected risks, while the level playing field should be strengthened. in addition, mechanisms should be developed at the global level to enable supervisors to cooperate effectively across borders. in this way, the stability of the financial system will be safeguarded, while combating money - laundering risks and protecting consumers. i take this opportunity to say a few words about the innovation hub that the central bank of cyprus set - up earlier this year. we see the innovation hub as a vital platform to encourage, promote and support fintech innovation, while maintaining regulatory oversight. the innovation hub can serve as a bridge between regulators, fintech startups and established financial institutions, facilitating dialogue, collaboration and knowledge - sharing. it provides a safe space for fintech firms to enter into a confidential dialogue with the central bank of cyprus, presenting their innovative products and business models and receiving feedback on regulatory requirements. the hub also enables the central bank of cyprus to gain valuable insights into emerging technologies, risks and trends, allowing us to adapt our regulatory framework effectively. an equally important initiative is the project on " digital onboarding " for the banking sector, which was launched by the central bank of cyprus, despite the fact that it is not within our duties to do so. we initiated this project, as we are convinced it brings multiple benefits to banks and to the real economy. in parallel to this, and with the aim to address the risks associated with the general digital transition, the central bank of cyprus has already required licensed institutions to carry out a series of actions on an annual basis, including annual anti - intrusion testing of their critical systems to address cyber risks. the importance of cyber risk has increased over the past

, stemming from energy and food prices, monetary policy attempts to re - align aggregate demand and aggregate supply so as to contain inflationary pressures. so, monetary policy has a more difficult job than when dealing with the typical demand driven inflationary pressures. therefore, it requires a balanced approach to contain cost - push inflation but avoid having an exacerbated negative effect on output and unemployment. in addition to the balance i mentioned before, monetary policy decisions have to deal with a lot of uncertainty. the risk of a wage - price increases spiral, even though not yet evidenced in the eurozone, would exacerbate inflationary pressures. if inflation expectations get de - anchored then inflation will persist for much longer. in such a case the pace of interest rate adjustment as well as the final rate level may have to increase. currently no material de - anchoring has been observed even though some measures indicate inflation expectations to be slightly above 2 per cent in medium term. 2 / 4 bis - central bankers'speeches there is also uncertainty surrounding geopolitical developments and the impact on the supply side if events on the ground worsen and they create further energy and commodity price shocks and disruptions. in such case, inflation and output would be worse than projected in 2023 and 2024. on the other hand, if there is an improvement in geopolitics, energy prices may fall as rapidly as they rose. therefore monetary policy has to act in the middle of a lot of uncertainty in a number of areas, hence monitoring and pacing is still very important. domestic economic developments let me now turn to domestic economic developments. the cyprus economy, continued to record noteworthy gdp growth, despite the outbreak of the war. real gdp growth in cyprus expanded by about 6 percent during the first half of 2022, mainly driven by a faster than expected recovery in tourism - related activities and, to a lesser extent, by growth in information and communication activities and in professional services. at the same time, weakness in the cyprus gdp performance could be expected to become visible towards the end of 2022 and the first half of 2023, primarily owing to the anticipated worsening in the international economic outlook, which also has an impact on the domestic developments. for 2023, gdp growth is expected to reach 2. 5 per cent. in terms of inflation, the harmonised index of consumer prices ( hicp ) reached 9 percent in september 2022 compared with 3. 6 percent in september 2021. the spike in the domestic inflation