Assessment of Cyprus economic competitiveness and productivity challenges

The Cyprus Economy and Competitiveness Council (SOAK) has highlighted significant long-term declines in national productivity despite a decade of economic growth following the island's previous financial crisis. Productivity is identified as a critical factor for GDP per capita and long-term social welfare, yet the country has struggled to implement effective improvements. Experts emphasize that addressing this issue requires modernizing the labor force through enhanced digital skills training and re-skilling initiatives. Furthermore, businesses are encouraged to invest more heavily in technological infrastructure to support growth. The European Commission has underscored that increasing productivity is vital for maintaining European competitiveness in the wake of the COVID-19 pandemic and regional geopolitical conflicts. Critics argue that both the government and employers have historically failed to prioritize productivity, leading to stagnant performance. The successful implementation of the national Recovery and Resilience Plan is cited as the primary mechanism for future progress. Rapid and flexible policy execution is deemed essential for Cyprus to improve its competitive standing.