Cyberattacks, mass migration, and climate change top risks to Cyprus economy, study shows

Cyberattacks against the government pose as the biggest risk to the Cypriot economy, while the mass influx of migrants and deteriorating climate change conditions make up remaining top three risks, a study by the Cyprus Economic and Competitiveness Council (Soak) revealed on Friday.

The risk assessment survey was carried out by Pulse research to highlight the possible risks facing the Cypriot economy. It involved 43 experts from the private, public and academic spheres of the country, filling out a questionnaire, which encompassed 18 possible risks.

According to the findings, the highest risk comes from cyberattacks against the government, which have hit the country extensively this year. The land registry, University of Cyprus and Open University of Cyprus were hacked, with the latter fined €45,000 for the privacy violations linked to its data leak.

Cyberattacks along with problems in the operation of critical infrastructure had a combined risk index of 85 per cent. The respondents gave a probability risk index of 81 per cent with the severity of the consequences amounting to a 90 per cent risk in the immediate horizon in the next two years.

The second highest risk is the mass influx of migrants, with a combined risk index of 82 per cent, with the probability risk amounting to 77 per cent and the severity of the consequences at 88 per cent.

The third highest risk concerns deterioration of climate conditions with a risk index of 82 per cent, followed by the deterioration of the public finances and public debt with a risk factor of 80 per cent. Natural disasters such as fires, floods and earthquakes carry a combined risk factor of 80 per cent.

The next risks were failure to execute digital transformation with a combined risk index of 80 per cent, with the risk of significant and prolonged increase in prices and inflation receiving the same risk assessment.

According to the survey, the risk of tensions in the Eastern Mediterranean and the possibility of an incident with Turkey received a risk index of 78 per cent, whereas the economic collapse of the national health scheme (Gesy) was marked at 78 per cent. The risk of significant deterioration in Cyprus’ corruption indices received a risk index of 77 per cent.

The assessment was carried out between September 18 and October 6 and excluded the conflict in the Gaza Strip between Israel and Hamas which began on October 7.