Prolonged increase in prices, the risk with the most significant consequences for the economy

A survey conducted by the Cyprus Economy and Competitiveness Council shows that the significant and prolonged increase in prices/inflation is ranked by experts from the private and wider public sector as the most likely risk with the most serious consequences for the Cypriot economy. 

The "significant and prolonged increase in prices/inflation", has a risk index of 93% and is considered a risk with a 90% probability of happening and a severity of consequences reaching 96%. It is considered as an immediate risk (in 0-2 years).

It is followed by the "deterioration of climatic conditions" with a risk index of 82%. The probability of occurrence is assessed at 78% with a severity of consequences of 85%. However, it is not considered an immediate risk rather a risk that could happen in the long term (5-10 years).

The results of the survey were presented on Monday at a press conference, at the Ministry of Finance, by the Council Members Charalambos Papageorgiou and Evangelos Tryphonos and the Director of "Pulse Market Research" which undertook the analysis of the data, Panayiotis Panayiotou.

The data was first recorded during the period April – June 2022 with the participation of 25 executives of the economy who were invited to give their own assessments regarding the 17 most likely risks for the Cypriot economy.

According to the results of the survey, the risk of "tensions in the Eastern Mediterranean with the possibility of an incident with Turkey" is ranked third with a risk index of 78% (62% probability of happening with a very high severity of consequences reaching 93%).

This risk is followed by the "mass influx of immigrants" with a risk index of 75% (70% probability of happening and high severity of consequences reaching 80%) and the risk of "cyber attacks" also with a risk index of 75% (65% probability of occurrence and high severity of consequences 85%).

"Failure to execute digital transformation" is ranked sixth with a risk index of 74% (60% probability of occurrence and high severity of consequences 87%), followed by "Deterioration of public finances and a significant increase in public debt" with a risk index of 73% (64% probability of occurrence and 82% severity of consequences), followed by "Large drop in tourist arrivals" with 73% (59% probability of occurrence and high severity of consequences 87%) and by "Financial collapse of the general health system" also with 73 % (57% probability of occurrence and high severity of consequences at 89%).