Nicosia: Prolonged drought and water shortages were highlighted as the most significant risk to the Cypriot economy, according to a risk assessment survey conducted by the Cyprus Economic and Competitiveness Council, the results of which were presented on Monday during a press conference at the Ministry of Finance.
According to Cyprus News Agency, the presentation of the survey results, which is being conducted for the fourth consecutive year, was undertaken by CECC member Evangelos Tryfonos and the Director of the research firm "Pulse Market Research," Panayiotis Panayiotou, who also undertook the analysis of the data.
According to Tryfonos, based on the combined probability and severity index (Risk Index), the main risks to the Cypriot economy are prolonged drought and water shortages (91%), cyberattacks on critical infrastructure (82%), worsening climate conditions (80%), lack of skilled personnel (80%), and failure of digital transformation (79%).
In his presentation, Panayiotou said that beyond the analysis of individual risks, the potential risks to the Cypriot economy were grouped into four broader categories in order to better understand their nature and origin, based on their likelihood of occurrence and the severity of their consequences.
As he noted, the four categories of risks relate to geopolitical security and external shocks, institutional strengthening and structural risks, social and environmental resilience, and macroeconomic stability.
He added that analysis of changes in risk groups in terms of their likelihood of occurrence and the severity of their impact makes it clear that the severity of the consequences remains relatively stable for all groups, while the probability of their occurrence varies, with the risk of institutional strengthening and structural risks being the most likely to occur.
"This sends a clear message that by taking preventive measures and implementing appropriate actions, we can effectively prevent and mitigate negative impacts," he stressed.
Asked whether and how the Council's research is being used, CECC President Demetris Georgiades said that the discussion on the risks and any measures to be taken is not conducted individually by an institution such as the CECC, but is part of a broader effort undertaken by the Ministry of Finance, the Central Bank, and the Fiscal Council.
"We also see that the public debate and the issues raised through it have made us realize what is serious here. So, this is one of the reasons why we are making all this effort, to keep it in the public debate," he added.
In response to another question about digital transformation and how the CECC perceives the associated risk, Georgiades said that the research does not interpret what should have been done and was not done.
"What we are saying is that the economic community in Cyprus does not see that digital transformation has progressed to a satisfactory degree, which is why it is having difficulty carrying out its commercial activities, obtaining permits to bring the appropriate workforce to Cyprus, encountering obstacles in bureaucracy and in how quickly it wants to move forward. This is the message we want to send," he said.
Beyond that, he added, "there is dialogue with the relevant ministries and services to accelerate this digital transformation."