Cyprus down three places in IMD world competitiveness ranking

Cyprus ranks in 33rd place on the 2021 IMD World Competitiveness Ranking index, moving down three places compared with 2020.

According to the Economics Research Centre 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 its previous position.

The decline is mainly due to three factors. The first was the deterioration of the efficiency of the state due to the pandemic’s burden on public finances and the weaknesses of the institutional framework.

The second was significantly reduced business profitability, mainly due to changing market conditions, technological challenges and the relatively high corporate debt, and the third was the deficiencies in the country`s infrastructure, in particular in scientific and technological infrastructure.

“This year`s ranking for 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,” a statement from the centre said.

The most significant improvements in the overall functioning of the economy recorded in the 2021 evaluation were related to low inflation, the strengthening of the long-term growth rate of the workforce and the improvement of the university education evaluation index.

By 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 pandemic.

The Economics Research Centre and the Cyprus Employers and Industrialists Federation act as Partner Institutes of the IMD World Competitiveness Centre for the 2021 edition of the IMD World Competitiveness Yearbook by contributing to the collection of the necessary data for Cyprus.