- Investment activity is gradually recovering but remains below 2008 levels
- Adoption of digital technologies by Cypriot firms higher than EU average
- Negative outlook on future investments, due to political and economic uncertainty
Today, the European Investment Bank (EIB) presented key findings of the new EIB Investment Survey 2019 for Cyprus at the “Investment and Investment Finance: the Cypriot case” conference in Nicosia. The conference is part of a series of events to debate current trends in investment in different EU Member States and is organised by the EIB and the Nicosia Chamber of Commerce.
The conference was attended by Minister of Energy, Commerce and Industry, Yiorgos Lakkotrypis and by economists, policymakers and representatives from financial institutions and the business community.
Commenting on the results of the survey EIB Secretary General Marjut Santoni said: “Cyprus has a reliable partner with the European Investment Bank Group. After the crisis alone we provided EUR 2.8 billion for long-term investment in crucial infrastructure and helped to increase small business lending together with local partners. We are glad to see that the economy is continuing to recover and we stand ready to further address investment barriers and support growth and job creation in Cyprus.”
Cyprus through the lens of the EIB Investment Survey
The 2019 EIB survey results show that investment activity in Cyprus is gradually recovering. The recovery is mainly driven by private sector activity but remains below the 2008 levels. According to the survey, four in five firms (79%) in Cyprus have invested in the last financial year, which is below the EU average of 85%.
Although only 11% of firms in Cyprus are either active innovators or developers, compared with the EU average of 28%, there is a significant adoption of digital technologies by Cypriot businesses. The share of companies organising their entire business around one or more digital technologies is higher than the EU average (22% in Cyprus vs 11% EU wide). This is particularly true for internet of things, platform and cognitive technologies in the service sector.
Energy costs, uncertainty and availability of skills remain the principal barriers to long-term investment cited by firms in Cyprus. Access to finance for business is improving, although micro and small firms continue to face constraints. In regards to future investments, firms are less optimistic than in 2018, citing political and economic uncertainty as the main reasons.
“Cyprus' recovery after the crisis is continuing, and the strong adoption of digital technologies by firms is a very positive development, “ said EIB Economics Department’s Director, Debora Revoltella during her opening remarks. ”The investment barriers cited by the firms we interviewed can also give some orientation on what can be addressed to drive future investment and growth. Namely, the availability of skilled staff, energy costs and access to digital infrastructure."
Read the full report: https://www.eib.org/en/publications/econ-eibis-2019-cyprus.htm