Cyprus ranks 40th in terms of competitiveness, moving down seven places compared to 2021.
The decline in the ranking is mainly due to a significant deterioration in the position of Cyprus in terms of economic performance, according to the IMD World Competitiveness Ranking 2022.
In this year's ranking, Cyprus's performance improved marginally in terms of government efficiency and infrastructure, while the country's position worsened slightly in terms of business efficiency, it added.
The challenges that Cyprus will face in 2022, it said, will be to manage the impact of war in Ukraine on local economy, particularly tourism and professional services. It will also have to tackle fiscal challenges that may arise from the need to support the economy due to the war in Ukraine and sanctions, and from likely increase in borrowing costs and deal with rising energy and raw material costs through targeted policies.
At the same time, it will continue managing the COVID-19 pandemic without disrupting economic activity and implement reforms associated with the Cyprus Recovery and Resilience Plan and the Long-Term Economic Strategy.