Cyprus Business Now: weekly wrap-up
Here are the top business stories in Cyprus from the week starting July 8:
Cypriot tech-driven analytics firm Ask Wire released a comprehensive assessment on Monday of fire risk in the Larnaca District, highlighting the distribution of properties within various fire hazard zones. The analysis, covering Larnaca’s 1,120.10 square kilometre area, revealed that the district faces a relatively low fire risk, with 45 per cent of its territory classified as low risk. The fire risk zones are categorised into four levels: low risk, covering 45 per cent of the district; medium risk, with 33 per cent; high risk, representing 13 per cent; and very high risk, accounting for 8 per cent. High and very high-risk areas are primarily located in the western part of the district, characterised by higher elevations and forested regions.
Following this environmental focus, the Bank of Cyprus celebrated another milestone on Tuesday with the graduation of the inaugural class from the BoC Academy, an initiative carried out in collaboration with the CIM Business School. Launched in 2023, the academy aims to foster both reskilling and upskilling, ensuring that the Bank of Cyprus staff remain at the forefront of the industry. The ceremony saw twenty bank employees awarded certificates in Strategy, Digital Marketing, Business, and Organisational Behaviour, highlighting the bank’s commitment to lifelong learning and professional development. Addressing the graduates, Irene Gregoriou Pavlidi, Executive Director of People & Change, emphasised the importance of continuous learning, stating, “Learning never ends and every experience, every piece of knowledge we gain makes us better people and professionals.”
In contrast to these positive developments, the real estate sector faced mixed fortunes. Cyprus recorded the largest increase in housing transactions among EU countries in 2023, according to data released by the European Union’s statistical office (Eurostat). While the number of housing transactions decreased in 13 out of the 16 EU countries for which data is available, compared to 2022, marking the second consecutive year that the majority of countries have seen a decline in sales. The largest decreases in transaction numbers in 2023 were observed in Luxembourg (-43.3 per cent), Austria (-26.4 per cent), and both Hungary and Finland (-24.5 per cent each).
Simultaneously, the Central Bank of Cyprus introduced a forward-looking initiative by presenting the benefits of the planned digital euro at a press conference on Tuesday. The digital euro, according to the CBC, is intended to complement, not replace, cash and existing electronic payment options. Among the advantages highlighted were its wide acceptance across the EU, stringent security standards, user-friendly nature, and guarantee of user privacy.
Meanwhile, the Cyprus Chamber of Commerce & Industry (Keve) announced a significant opportunity for local businesses. The EU-Japan Centre for Industrial Cooperation is organising its inaugural mission to Japan, specifically targeting the smart factory and robotics sectors. This mission, scheduled to coincide with the Factory Innovation Week in Tokyo in January 2025, will offer 12 EU SMEs and clusters a valuable opportunity to enter the Japanese market or further develop their ongoing activities in the country.
On another economic front, inflation in Cyprus, excluding increases in excise taxes, fell by 0.32 per cent in the first half of 2024, when compared to the previous six months, spanning the period between July and December 2023. This report, released by the Cyprus Statistical Service (Cystat), indicates a subtle shift in the economic landscape, potentially impacting both consumers and businesses alike.
Adding to the economic discourse, the Cyprus Borrowers Association (Syprodat) issued a stark warning about the mounting financial pressures faced by households, borrowers, and businesses due to high prices, rising interest rates, and insufficient government support. “Households, borrowers, and businesses are struggling every day with high prices, high interest rates, and inadequate support from the government,” Syprodat stated, echoing concerns that are likely resonating across various sectors of the economy.
In the banking sector, Demetra Holdings reported a significant increase in its investment value in Hellenic Bank (HB) during the first half of 2024. The company’s latest investment statement showed that by the end of June 2024, the value of the company’s investment in Hellenic Bank had risen to €313.6 million, up from €262.8 million at the end of 2023. This represents 78.32 per cent of Demetra Holdings’ assets, compared to 75.39 per cent in 2023.
Amid these developments, European Commissioner for International Partnerships Jutta Urpilainen discussed the philosophy underpinning the European Union’s strategy for international development, known as the Global Gateway, during an interview with the Cyprus News Agency (CNA), ahead of her Thursday visit to Cyprus. Urpilainen’s schedule includes meetings with Cyprus’ Foreign Minister Constantinos Kombos and various representatives from the private sector, discussing opportunities and challenges for Cypriot shipping and the EU’s role in enhancing it. She highlighted the fundamental role of sustainable infrastructure and connectivity in balancing growth and fostering mutual prosperity through trade and cooperation between the EU and partner countries.
Furthermore, the Deputy Ministry of Research, Innovation and Digital Policy announced that Cyprus has made robust strides in the digital sector, backed by the European Commission’s latest ‘State of the Digital Decade 2024’ report. This annual review measures the digital readiness of EU member states and tracks their progress towards the ambitious goals set for 2030. Deputy Minister Nicodemos Damianou expressed his satisfaction with the progress and momentum recorded in Cyprus’ digital landscape, stating, “The government is committed to the digital transition, striving to implement digital solutions that significantly enhance the everyday lives of Cypriot citizens.”
Adding to the accolades, the Research and Innovation Foundation (RIF) commented on the latest results from the European Innovation Scoreboard 2024, which once again reaffirms Cyprus’ progress in the field of innovation, classifying it as a Strong Innovator for the third consecutive year. Notably, Cyprus leads its peers with an impressive 39 per cent improvement since 2017, the highest recorded in the region. Demetris Skourides, the Chief Scientist for Research, Innovation and Technology and Chairman of the Board of Directors of the RIF, lauded the collective efforts that have driven these results. “This is a significant success for our country,” he noted, “the strategic policies, the robust funding programmes of the RIF, and the supportive incentives from the government are all paying dividends, boosting our entire Research and Innovation ecosystem.”
The Cyprus Association of Hospitality Venues (Pasika) called on newly elected mayors and municipal councils to be vigilant and stringent in granting permits for public events, stressing that festivals are hurting their businesses. In its statement, Pasika said that it is necessary for public authorities to set criteria, standards, and conditions, including the association’s involvement, for approved events. Moreover, the association expressed significant concern over the surge of complaints from its members regarding the numerous events being held across Cyprus, especially in urban areas.
Lastly, the tourism sector in Cyprus also faces significant challenges this year. According to Thanos Michaelides, president of the hotelier’s association (Pasyxe), there has been an estimated downturn with 30,000 fewer visitors and a loss of approximately €25 million. Michaelides emphasised the need for extending the tourist season and increasing the number of operational hotel units. He believes such measures would help mitigate seasonal variations in employment, boost trade, and grow state revenue. This strategic approach could provide more stability for workers within the tourism sector, thereby attracting more individuals to tourism-related professions. Michaelides also stressed the importance of the tourism industry, which employs about 53,000 people, or 11 per cent of Cyprus’ employed population, highlighting its crucial role in the national economy and labour market. This workforce includes a diverse range of professionals, from chefs and IT specialists to lawyers and engineers, making the sector a crucial part of the national economy and labour market.