ICT sector contribution to the economy estimated to reach close to €3 billion in 2022

The technology sector’s (ICT) contribution to the Cypriot economy is estimated to reach €3 billion this year boosting the diversification and the resilience of the Cypriot economy.

According to the latest data more than 1,200 foreign companies, mainly in the field of technology, began operations in Cyprus through the Ministry of Commerce’s Business Facilitation Unit, while 9,800 job permits have been issued to foreign specialised personnel, something which boosted investments and domestic consumption and consequently GDP growth.

The strong growth in the ICT sector in Cyprus has been acknowledged by the European Commission which has upgraded its projection for GDP growth this year by 2.4% to 5.6%. “This is due to higher-than-expected growth in the second quarter of the year, the better-than-expected performance of tourism, as well as the impact of the expanding ICT sector,” the Commission said in its latets post-programme surveillance report.

In statements to CNA, Evgenios Evgeniou, Chairman of the Cyprus Investment Promotion Agency (Invest Cyprus) highlighted the importance of the ICT sector for Cyprus, as apart from its contribution to the economy, the sector contributes decisively in the diversification of the country’s growth model and in the reduction of the trade deficit.

According to data the ICT sector’s contribution is estimated to amount close to €3 billion this year, marking an annual increase of 58% compared to €1.9 billion in 2021. Although the ICT sector includes local telecommunication companies, the increase over €1 billion, amid growing uncertainty due to the war in Ukraine is largely attributed to the attraction of foreign tech companies and specialised staff to Cyprus.

Cyprus implemented a plan to attract foreign technology companies and talent, involving an incentives scheme tabled by the Ministry of Finance, which has been by approved the parliament and are implemented by Invest Cyprus, the Ministry of Commerce, the Ministry of the Interior and the Deputy Ministry for Research, Innovation and Digital Policy.

“This performance is nothing but the fruit of a collective effort and action by the government, the parliament, the public and the private sector,” Evgeniou added, noting that collective efforts yield results.

He noted that even though economic challenges will continue in 2023 “we are optimistic that the interest by international companies of high specialisation to relocate in Cyprus will continue unabated.”

According to data by Invest Cyprus so far more than 35 large foreign corporations have shown in writing interest to relocate their headquarters in Cyprus, with the majority of letters of intent for investments in Cyprus coming from multinational corporations, some of which have already invested on the island, while other investments are in the pipeline.

These investments had a positive impact in other sectors of the economy as well, such as education, health, accommodation, investment funds, asset management, energy, start-ups and real estate.

At the same time, the Ministry of Commerce Facilitation Unit has assisted more than 1,200 foreign companies to begin operations in Cyprus, while data by the Migration Department show that so far a total of 9,800 job permits have been granted to specialised personnel and 8,100 family members have relocated to Cyprus.

It is no coincidence that the Greenfield FDI Performance Index has shown that Cyprus was among the Top 10 countries concerning the recovery of investments following the pandemic with 150% growth in the first half of 2022 compared with the respective period of 2019, while investments in the technology sector have spiked by an annual 600% in the same period.

Source: Cyprus News Agency