Nicosia, Cyprus. Cyprus’ economy has shown resilience despite rising geopolitical uncertainty, but high energy costs, delayed reforms and labour shortages continue to limit growth prospects, according to Employers and Industrialists Federation (Oev) president George Pantelides.
Resilience and economic adaptation
Speaking to Politis ahead of the federation’s annual general meeting on Tuesday, Pantelides said the economy had maintained positive growth rates, stabilised public finances and strengthened investment activity. He said this showed Cyprus’ economic model had adapted to a demanding international environment.
Pantelides said a decisive role in this resilience had been played by the flexibility and adaptability of Cypriot enterprises and the gradual diversification of the economy into higher value-added sectors, including services, technology and energy.
Structural weaknesses and reform delays
Pantelides said the positive picture should not obscure structural weaknesses weighing on the country’s prospects.
He said high energy costs remain one of the most significant weaknesses, directly affecting operating costs and competitiveness, and added that dependence on imported raw materials leaves the economy exposed to external shocks.
He also said delays in implementing key reforms, including faster justice delivery, reduced bureaucracy and full digitalisation of the state, continue to burden the business environment. Pantelides added that a lack of human resources in critical sectors remains an equally important issue.
Middle East crisis and economic impact
Pantelides said the crisis in the Middle East had become one of the main sources of uncertainty for Cyprus, citing the island’s geographical proximity and trade links with the wider region.
He said the impact is multifaceted, affecting energy costs, tourism, supply chains and inflationary pressures.
Tourism concerns
On tourism, Pantelides said concern was justified, as stability and a sense of security remain key factors when travellers choose a destination.
How do you think Cyprus can address high energy costs while maintaining competitiveness?