[PIO] Announcement by the Cyprus Economy and Competitiveness Council on the 3rd Cyprus Economy Competitiveness Report

The Cyprus Economy and Competitiveness Council (CECC) today published the 3rd Cyprus Economy Competitiveness Report. Since its establishment in 2018, the Council has assumed responsibility for the systematic monitoring of the evolution of the competitiveness of the Cypriot economy and international trends. In this context, it prepares and publishes a biennial competitiveness report for Cyprus. The Competitiveness Reports, issued by the EPAQ, are the Council's main analytical tool for the comprehensive identification, assessment and monitoring of the factors affecting the competitiveness of the Cypriot economy.

The first Competitiveness Report was prepared in 2019 by a Dutch consultancy firm with EU funding. The Minister of Finance submitted this report to the Council of Ministers, which decided to promote the implementation of the Report's recommendations by the relevant ministries. In addition, the results of the Report were also taken into account in the preparation of the Long-Term Strategy for the Sustainable Development of the Cyprus Economy, from which a large number of actions have already started to be implemented through the Recovery and Resilience Plan.

The second and third Competitiveness Reports were prepared by the University of Cyprus, which also made a substantial contribution to the development of the first Report through its participation in the Steering Committee. The third Competitiveness Report (2023) updates and extends the analysis and findings of the previous two Reports and focuses on the issue of Productivity. It includes an assessment of Cyprus' competitiveness in the context of a broad definition of competitiveness, encompassing the set of institutions, policies and other factors that support and sustain value creation by businesses and support high and rising standards of living for its citizens on a sustainable basis. In addition, it documents the comparative advantages as well as weaknesses and challenges facing the economy, and provides policy recommendations to address the challenges and enhance the competitiveness of the economy.

The Report also includes a separate section on the impact of the large influx of foreign workers observed in recent years on the country's economic activity. The Report stresses the importance of the Long-Term Strategy for the Sustainable Development of the Cypriot economy, which has included reform and investment measures that promote the transition to a green and digital economy, diversify the economy and strengthen its resilience.

The Report analyses the competitiveness performance of the Cypriot economy, both overall and in selected aspects, on the basis of internationally recognised indicators and methodologies, which are widely used in It also examines more than 150 specific indicators reflecting individual aspects of the competitiveness of the Cypriot economy and compares it with the performance of 12 other selected economies and the EU average. An overview of the economy's competitiveness performance over time is also provided.

However, despite the generally good regulatory and institutional conditions and the good market conditions prevailing in Cyprus, the analysis of the indicators identifies several areas where the competitiveness of the Cypriot economy could be further enhanced. According to the Report, in many cases no new policies are needed from the government but more emphasis on the effective implementation and coordination of existing policies.

1. Promoting entrepreneurship and enhancing the growth potential of Cypriot enterprises.
2. Strengthen business linkages and synergies, by supporting their integration into supplier networks of international companies as well as cooperation between the business, research and academic communities.
3. Strengthening the uptake of digital technologies, by incentivising the digitisation of key sectors and strengthening digital skills and productivity-enhancing investments in the ICT sector.
4. Enhancing the availability and access of enterprises to alternative sources of finance[/B].
5. Better use of human resources through education and training, by increasing the number of graduates with qualifications in technical and scientific fields, and by strengthening digital and entrepreneurship skills to meet both current and future demands.
6. Attracting foreign direct investment by creating an attractive economic environment.
7. Diversifying the economy by developing new sectors to complement existing economic activities, and strengthening the resilience of key existing sectors.

The full text of the 3rd Competitiveness Report for Cyprus can be found on the website of the Economic and Competitiveness Council.

(NYAN/AF)
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