Cyprus ranks 33rd, in the 2021 IMD World Competitiveness Ranking, moving down three places compared to 2020.
According to the Economics Research Center of the University of Cyprus, the position of Cyprus deteriorated in three out of the four categories that make up the overall ranking. The largest drop was registered in the category of business efficiency. In the category of economic performance, Cyprus maintained the position reached in 2020.
The press release points out that the decline is mainly due to three factors. The first factor is the deterioration of the efficiency of the state due to the pandemic’s burden on public finances and the timeless weaknesses of the institutional framework. The second is the significantly reduced business profitability, mainly due to changing market conditions, technological challenges and the relatively high corporate debt and the third is the deficiencies in the country`s infrastructure, in particular in scientific and technological infrastructure.
"This year`s ranking of Cyprus has highlighted weaknesses that burden the competitiveness of companies and the country. Reforms that improve the institutional framework and promote digital transformation are expected to strengthen competitiveness and make the economy more resilient to technological and environmental challenges, but also more resilient to crises," it is added.
The most significant improvements in the overall functioning of the economy recorded in the 2021 evaluation are related to low inflation, the strengthening of the long-term growth rate of the workforce and the improvement of the university education evaluation index. In contrast, the sharp deterioration in some criteria in this year`s assessment, such as shrinking fixed capital investment, increased government subsidies and the budget deficit, was mainly a result of the COVID-19 pandemic.
The Economics Research Centre and the Cyprus Employers and Industrialists Federation act as Partner Institutes of the IMD World Competitiveness Center for the 2021 edition of the IMD World Competitiveness Yearbook by contributing to the collection of the necessary data for Cyprus.