Cyprus Business Now: rating agency report, CBC governor, housing conference

The European Central Bank (ECB) has scope to further cut its key interest rates as inflation moves closer to its target, but it should remain vigilant about potential upside risks, according to Christodoulos Patsalides, governor of the Central Bank of Cyprus and ECB Governing Council member.

With the eurozone economy showing signs of slowing and potentially proving weaker than forecast, Patsalides told Bloomberg in an interview that the same cannot be said for price pressures.

As a result, he urged caution in withdrawing the ECB’s tight monetary policy too soon.

“If there are no upward inflation surprises, then we can and should continue lowering rates,” Patsalides said from Washington, where he was attending the annual meetings of the International Monetary Fund (IMF) and the World Bank.

Cyprus’ fiscal balance has made a remarkable recovery from recent shocks, with current fiscal surpluses exceeding pre-pandemic levels, according to rating agency Morningstar DBRS.

The agency attributed this improvement to strong revenue growth, primarily driven by rising social security contributions and higher corporate tax revenues due to a broader tax base.

“Government revenues have benefited not only from cyclical favourable conditions but also from structural improvements on the revenue side,” the agency said.

Unlike most other Eurozone countries, public revenues in Cyprus have grown at a faster pace than nominal GDP in recent years.

The share of total public revenue in Cyprus increased significantly from 39.4 per cent of GDP in 2019 to 43.3 per cent in 2023, while the ratio remained generally unchanged for the Eurozone.

Cyprus needs bold solutions to address its housing crisis, according to Yiannis Misirlis, president of the Cyprus Land and Building Developers Association (LBDA).

Speaking at a conference titled “Housing Policy: From Theory to Practice” on Tuesday evening, Misirlis emphasised the urgency of addressing housing shortages that affect thousands of citizens, particularly vulnerable groups.

The event allowed business leaders and other local stakeholders to discuss new housing policies focused on increasing affordable housing through targeted incentives. 

During his speech, Misirlis praised the ministry’s housing policy as a crucial step forward, expressing the Association’s commitment to constructive involvement in the effort.  

“The common goal of all is to find radical solutions to solve the housing problem,” he said, stressing that the association would continue to offer expertise and support through its members. 

The Paphos Regional Tourism Board (Etap) on Wednesday announced that up to €25,000 in funding is available for small and medium-sized enterprises (SMEs).

The funding is being made available in the context of the ‘Smarties for SMEs’ grant scheme.

The scheme seeks to enhance innovation, resilience, and sustainability in the tourism sector.

The announcement emphasised that 15 businesses are expected to benefit from a total of €375,000 through a selection process to fund actions towards the green and digital transitions.

The board clarified that the grant offers 100 per cent funding of up to €25,000 per eligible business.

TechIsland, the largest tech association in Cyprus, on Wednesday announced PwC Cyprus as the latest addition to its esteemed group of donors.

“This partnership underscores a shared vision of fostering a prosperous, tech-driven future for the island, positioning Cyprus as a leading technology and innovation hub,” the association said.

PwC Cyprus, a leader in professional services, has joined TechIsland as part of its commitment to driving Cyprus’ transformation through technological innovation, education, and sustainable economic growth.  

This collaboration emphasises both parties’ shared vision of advancing the island’s global competitiveness in the tech sector. 

“We are excited to welcome PwC Cyprus to our growing network of donors,” TechIsland General Manager, Tanya Romanyukha said.

One in five businesses in Cyprus were cyberattacked in 2023 and four in five consider cybersecurity to be a fundamental factor for digital transformation, according to a study by the Cyprus Information Technology Enterprises Association (CITEA).

The study indicated that 18 per cent of businesses were attacked in 2023, 58 per cent said they used AI tools, including ChatGPT, 92 per cent intended to invest in digital transformation in 2024, 82 per cent thought cybersecurity was crucial for digital transformation and 78 per cent said their greatest challenge was enhancing their employees’ digital skills.

The 58 per cent using AI tools also said their main priorities were automated tasks and data analysis.

CITEA said on Wednesday that the findings also showed that 80 per cent of businesses considered a user-friendly interface crucial to customer experience.

The Cyprus Stock Exchange (CSE) ended Wednesday, October 23 with losses.

The general Cyprus Stock Market Index was at 196.67 points at 12:12 during the day, reflecting a decrease of 0.84 per cent over the previous day of trading.

The FTSE / CySE 20 Index was at 119.82 points, representing a drop of 0.85 per cent.

The total value of transactions came up to €181,766, until the aforementioned time during trading.

In terms of the sub-indexes, the main and investment firm indexes fell by 1.06 per cent and 1.42 per cent respectively. The alternative index rose by 0.07 per cent while the hotel index remained stable.

The biggest investment interest was attracted by the Bank of Cyprus (+0.47 per cent), Hellenic Bank (-1.99 per cent), Demetra (-1.44 per cent), Logicom (no change), and Vassiliko Cement Works Public Company Ltd (no change).