Cyprus Business Now: weekly wrap-up

Here are the top business stories in Cyprus from the week starting March 25:

The European Commission recently released a report highlighting Cyprus’ economy as on a positive trajectory, forecasting growth in GDP and a decline in inflation. However, it cautioned about the potential risks arising from Cyprus’ economic interconnections with other economies both within and outside the EU, emphasising geopolitical and trade tensions as per its overview of macroeconomic imbalances. In a further elaboration, the commission issued in-depth reviews (IDRs) for six member states including Cyprus, the Netherlands, Romania, Slovakia, Spain, and Sweden, indicating that assessments for additional member states are on the horizon.

In a related note on regulatory actions, the Cyprus Securities and Exchange Commission (CySEC) has taken a firm stance by imposing fines totalling €76,500 across three distinct decision announcements in March, targeting two entities for various violations. This move underscores the regulatory body’s commitment to maintaining a fair and transparent financial environment.

Turning to the real estate sector, Ask Wire, a Cypriot real estate market analytics firm, unveiled insights into the local property market through a report detailing the ten most expensive property transactions in February 2024. Remarkably, the top 50 property transactions for that month alone amassed over €55 million in total value, with a plot of land in the Paphos district fetching the highest price at €4.8 million. This report serves as a significant indicator of the state and dynamics of Cyprus’ real estate market.

Furthermore, the recent 18th Real Estate, Land Development, Planning, and Construction Conference featured Interior Minister Constantinos Ioannou, who highlighted the latest developments in the real estate sector and outlined the government’s urban development priorities. His address not only appreciated the conference’s role in facilitating professional discourse but also underscored the government’s focus on scrutinising recent market trends.

From a financial perspective, Cyprus observed a decrease in net demand for new business loans in the last quarter of 2023, continuing a trend that started in early 2022, albeit at a lesser rate than anticipated. However, the Central Bank of Cyprus’ survey indicated a steady demand for housing loans, breaking a previous declining trend. The bank attributed the decrease in business loan demand primarily to the high-interest rates, a factor that businesses across Cyprus are increasingly mindful of.

On the supervisory front, CySEC announced its intention to intensify scrutiny of the cross-border activities of Cypriot Investment Firms (CIFs), especially those involved in distributing complex financial products like Contracts for Differences (CFDs). This decision, part of CySEC’s supervisory priorities for 2024, highlights the regulator’s heightened vigilance over the distribution of such products, with a particular focus on firms deemed high or medium-high risk.

In the realm of international collaboration and development, DP World, a global logistics giant, hosted Transport Minister Alexis Vafeades and Shipping Deputy Minister Marina Hadjimanolis at its Dubai Headquarters. This visit highlights DP World’s significant role in Cyprus’ maritime sector and its broader economic landscape. The statement from DP World Limassol’s CEO, Simon Pitout, emphasised the importance of such interactions for the continued partnership between DP World and the Cypriot government.

Addressing another crucial sector, the annual tourism conference organised by the Association of Cyprus Tourist Enterprises, with support from the Hellenic Bank, centred on the future of Cyprus’ tourism industry. The conference delved into various aspects such as the green transition, sustainability, and resilience, aiming to devise a more competitive model for Cyprus’ tourism, reflecting the sector’s adaptation to new realities.

Innovation and entrepreneurship also took centre stage as Cyprus prepares to host the Startup World Cup, offering a grand prize of $1 million. This global pitch competition, making its debut in Cyprus, promises significant opportunities for local startups, spotlighting Cyprus as a burgeoning hub for innovation and venture capital.

Additionally, the state-owned asset management company, Kedipes, announced its largest quarterly cash payment to the state since its inception in 2018, amounting to €140 million for Q1 2024. This move is part of the efforts to repay the state aid received by the former Cooperative Cyprus Bank, marking a significant step towards financial stabilisation and accountability.

In maritime affairs, the Deputy Minister of Shipping highlighted a substantial increase in the Cypriot flag-registered fleet, a testament to the growing prominence of Cyprus in the global shipping industry. This development, along with other initiatives, illustrates the ministry’s achievements under the current administration, further strengthening Cyprus’ position in the maritime sector.

The PwC Cyprus Foundation’s participation in promoting financial literacy among the youth during Global Money Week underscores a communal effort towards empowering the next generation with essential financial knowledge and skills. This initiative, in collaboration with the Ministry of Education, Sport and Youth, and Junior Achievement, is crucial for fostering a financially literate society.

Lastly, the survey conducted by the Paphos Regional Tourism Board (Etap), revealing a capacity of approximately 20,000 beds across self-catering accommodations, highlights the district’s readiness to welcome tourists, evenly balancing between apartments and houses or villas. This insight provides a clear perspective on Paphos’ accommodation landscape, which is integral to the region’s tourism infrastructure.