The share of the population at risk of poverty or social exclusion in Cyprus, according to the EU AROPE indicator, remained steady at 16.7% in 2023 with the percentage of the population at risk of poverty unchanged at 13.9%, the Statistical Service of Cyprus (Cystat) has said.

According to the results of the Survey on Income and Living Conditions 2023, with income reference period the year 2022, 16.7% of the population or 153,000 persons were at risk of poverty or social exclusion (AROPE indicator, the main indicator to monitor the EU 2030 target on poverty and social exclusion).

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“The indicator for 2023 remained at the same level compared to the previous year when it was also at 16,7%. Therefore, the indicator remained unchanged in 2023, after the continuous downward trend of the recent years,” Cystat added.

Even though the improvement in recent years has been reflected in both women and men, still throughout the years, women are maintaining their unfavorable position in respect to men.

In 2023, the relevant indicator for women was 18.1% and for men 15.3%, Cystat added.

Furthermore, in 2023, the percentage of the population that was at risk of poverty, meaning that its disposable income was below the at-risk-of-poverty threshold, was 13.9% or 128,000 persons, remaining at the same level as that of the previous year.

The at-risk-of-poverty threshold, which is defined at 60% of the median total equivalized disposable income of the households, was estimated in 2023 at €11,324 for single-person households and at €23,780 for households with 2 adults and 2 children younger than 14 years old, exhibiting an increase of 5,7% in respect to 2022, where the respective thresholds were €10,713 and €22,498.

The median equivalized disposable income (one person) in 2023 was €18,873 in comparison to €17,856 in 2022, Cystat said.

Moreover, the share of the population living at risk of poverty, before any social benefits and pensions (social transfers) were included in the disposable income of the households, was estimated at 33.1%.

When only pensions were included in the disposable income of the households, dropped was reduced to 20%, while when social benefits were further included, the percentage was reduced to 13.9%

In 2023, all the social transfers reduced the indicator by 19.2 percentage points, (13.1 pp as a result of pensions and 6.1 as a result of the social benefits, Cystat added.

The share of hybrid cars rose from 26.6% to 37.3% during the period of January-May 2024, compared to the same period of 2023, according to Cystat.

At the same time, the share of petrol-powered passenger cars dropped to 49.3%, from 60.8% in the corresponding period of 2023.

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The total registrations of motor vehicles during this period increased by 22.1% to 21,881, from 17,927 in January-May 2023.

Passenger saloon cars increased to 17,176 from 14,434 in January-May 2023, recording a rise of 19%. Of the total passenger saloon cars, 7,374 or 42.9% were new and 9,802 or 57.1% were used cars. Rental cars in particular recorded a fall of 29.4% to 1,860.

The share of petrol-powered passengers’ cars to the total of this category of vehicles decreased in January-May 2024 to 49.3% (from 60.8% in the corresponding period of the preceding year) and that of diesel-powered cars to 10% in 2024 from 10.6% in 2023. On the other hand, the share of electric cars rose from 2.1% in 2023 to 3.4% in 2024 and of hybrid cars from 26.6% to 37.3%.

Motor coaches and buses registered in January-May 2024 decreased to 83, from 115 in the same period of 2023. Goods conveyance vehicles increased by 42.6% to 2,471 in January-May 2024, compared to 1,733 in January-May 2023. In particular, light goods vehicles increased by 46.1% to 1,955, heavy goods vehicles by 35.3% to 291, road tractors (units of trailers) by 70.4% to 92 and rental vehicles by 5.6% to 133.

Mopeds of less than 50cc registered in January-May 2024 increased to 381 compared to 61 in the corresponding period of the previous year. Motorcycles over 50cc increased by 7.7% to 1,479 in January-May 2024, compared to 1,373 in the same period of 2023.

In May 2024, the total registrations of motor vehicles numbered 4,292, recording a decrease of 9.6% compared to 4,747 in May 2023.

Passenger saloon cars registered a decrease of 14.5% to 3,325, from 3,888 in May 2023.

As part of the International Labour Organization (ILO) annual meeting in Geneva, Cyprus’s Minister of Labour, Yiannis Panayiotou, is set to engage in informal discussions with key stakeholders in the hotel and construction sectors. These talks aim to address the ongoing disputes regarding the renewal of collective agreements, which have been unresolved since May 2022. The main contention lies in the unions’ demand for legally regulated wages and contract terms, opposed by employers. Panayiotou’s mediation proposal, expected by the end of June, seeks to reconcile these differences and establish a mutually agreeable framework.

Background of the Dispute

The expiration of collective agreements in May 2022 has left a significant gap in the legal regulation of wages and contract terms in these critical sectors. The unions have been advocating for robust legal frameworks to ensure fair wages and working conditions, highlighting the necessity of such measures for worker protection and industry stability. Conversely, employers argue that increased regulation may lead to inflexibility and higher operational costs, potentially impacting the sectors’ competitiveness and growth.

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Importance of Mediation

The mediation in Geneva represents a crucial effort to find common ground between the conflicting parties. Panayiotou’s approach involves leveraging the neutral environment of the ILO meeting to facilitate open dialogue and foster a collaborative spirit. The outcome of these talks is vital for maintaining industrial harmony and ensuring that both employees’ rights and employers’ operational concerns are adequately addressed.

Broader Implications

Resolving these disputes is not just about immediate contractual terms; it reflects the broader economic and social landscape of Cyprus. Successful mediation could set a precedent for future negotiations in other sectors, promoting a balanced approach to labour relations. Furthermore, achieving a consensus would enhance the stability and attractiveness of the Cypriot labour market, potentially leading to increased investment and growth in the hotel and construction industries.

European stock markets have recently exhibited signs of recovery, successfully navigating past recent political uncertainties that have loomed over the continent. The pan-European Stoxx 600 index saw a modest gain of 0.2%, reflecting a broader market sentiment of cautious optimism. Sector-specific performance was led by the retail sector, which experienced a 0.6% rise.

Key Indices Performance

Among the key indices, the UK’s FTSE 100, Germany’s DAX, and France’s CAC 40 all posted gains, contributing to the overall positive momentum in the markets. This upward trend was further supported by the successful initial public offering (IPO) of British computer company Raspberry Pi, which raised a substantial £166 million. This successful IPO underscores investor confidence in innovative tech companies despite broader economic uncertainties.

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UK Labour Market Insights

In the UK, the unemployment rate experienced a slight increase to 4.4%, indicating some level of strain in the labour market. Concurrently, employment figures and job vacancies showed minor declines, which could signal a cooling job market. However, wage growth has remained steady, posing potential challenges for the Bank of England as it navigates its interest rate policies. The stability in wage growth, despite rising unemployment, could complicate efforts to curb inflation without stifling economic growth.

Market Sentiment and Future Outlook

The market’s ability to rebound despite political risks is indicative of a resilient economic landscape in Europe. Investors seem to be regaining confidence, focusing on underlying economic fundamentals rather than political turbulence. This resilience is crucial as Europe continues to tackle various challenges, including inflationary pressures and economic policy adjustments.

For business professionals and investors, this recovery suggests a cautious but positive outlook for the European markets. The successful IPO of Raspberry Pi and the overall gains in key indices highlight potential investment opportunities in sectors showing robust performance. Moreover, the labour market trends in the UK warrant close monitoring, as they could influence broader economic policies and market conditions.

Revenue from tourism reached an estimated €223.3m in January–March 2024, rising 11.7% compared to €200m in the first quarter of 2023, Cystat said.

Based on the results of its Passengers Survey, in March, revenue from tourism reached €113m, compared to €97.8m in the corresponding month of 2023, recording an increase of 15.5%.

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The average expenditure per person was €558.88 in March 2024 compared to €530.72 in March 2023 (up 5.3%).

Tourists from the United Kingdom, again Cyprus’ largest tourist market with 31.8% of the total in March, spent on average €73.49 per day, while tourists from Poland, the second largest market with 10.4% of total tourists, spent on average €75.86.

Tourists from Germany, the third largest market with 9.8%, spent on average €98.66 per day, while tourists from Greece with 9% of the market, spent on average €43.37 per day.

Finally, tourists from Israel, the fifth place on the market with 8.2%, spent on average €143.21 per day.

Cisco has unveiled a $1 billion fund aimed at bolstering artificial intelligence (AI) startups, aligning with the trend among tech giants to invest heavily in AI innovation. This fund, managed through Cisco’s investment arm, has already allocated nearly $200 million to notable startups including Cohere, Mistral AI, and Scale AI.

Strategic Investments

Cisco’s investments target companies developing foundational AI models, which utilise extensive datasets to support a wide range of applications. Scale AI, one of the beneficiaries, is valued at approximately $14 billion, while Cohere and Mistral AI are each valued at around $5 billion. These investments are part of Cisco’s broader strategy to integrate generative AI and machine learning across its product portfolio.

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Industry Context

The AI investment surge was ignited by OpenAI’s launch of ChatGPT in 2022, prompting companies like Meta and Amazon to enhance their AI portfolios. Cisco’s commitment to AI is evident from its over 20 AI-focused acquisitions and investments in recent years. This strategic focus underscores the growing importance of AI in driving innovation and competitive advantage in the technology sector.

Implications for Business

For business professionals and entrepreneurs, Cisco’s significant AI investments highlight the critical role AI will play in future technological advancements. These investments not only foster innovation but also signal lucrative opportunities for startups and established companies alike.

Cisco’s $1 billion AI fund represents a strategic move to solidify its position in the rapidly evolving AI landscape. By backing promising AI startups, Cisco aims to drive technological innovation and secure a competitive edge in the market. This initiative also reflects the broader industry trend of investing in AI as a pivotal element of future growth and development.

This substantial investment underscores the critical importance of AI technologies and their potential to reshape industries. For those in the tech and investment sectors, Cisco’s bold move offers a glimpse into the future trajectory of AI and its transformative impact on global business.

Researchers funded by the EU are developing advanced power cables to enhance Europe’s electrical grid, aiming to reduce energy waste, cut costs, and lower emissions. The SUBRACABLE project, led by Danish company SUBRA, utilises ceramic-based superconductors to transmit electricity with minimal energy loss. These cables use 99% less copper and have 90% lower energy loss compared to traditional cables. By 2027, SUBRA aims to produce a 400-metre demonstration cable, significantly advancing sustainable energy infrastructure in Europe.

Key Benefits

1. Energy Efficiency: Superconductor cables drastically reduce energy loss, enhancing grid efficiency.
2. Cost Reduction: Lower material and operational costs make energy transmission cheaper.
3. Sustainability: Reduced reliance on copper and lower emissions contribute to a greener energy sector.

Future Prospects

SUBRA’s advancements promise to revolutionise energy transmission, aligning with the EU’s goals to increase renewable energy use and decrease greenhouse gas emissions. This innovation is expected to play a pivotal role in Europe’s transition to a more sustainable and resilient energy system.

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As Europe seeks to expand its renewable energy capabilities, such technological advancements are essential for achieving long-term energy sustainability and economic efficiency. The successful deployment of these cables could set a new standard in global energy infrastructure, positioning Europe at the forefront of the clean energy transition.

Cyprus has experienced a notable rise in total employment in the first quarter of 2024, marking a significant annual increase of 2.2%, according to data released by the Statistical Service of Cyprus (Cystat). This uptick reflects a positive trend in the island’s economic activities, signalling robust growth and resilience amid global economic challenges.

Key Statistics and Sectoral Performance

The total number of employed individuals in Cyprus reached 474,587 in Q1 2024, up from the previous year. This total comprises 425,090 employees and 49,497 self-employed individuals. Noteworthy increases were observed in the sectors of Administrative and Supporting Service Activities, Education, and Accommodation and Food Service Activities. These sectors have demonstrated strong performance, contributing significantly to the overall employment growth.

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In addition to the rise in total employment, the actual hours worked during the first quarter also saw a commendable increase of 2.6%, totalling 217,668 thousand hours. This metric is crucial as it underscores the increased labour demand and productivity within the Cypriot economy.

Implications for the Cypriot Economy

The 2.2% annual growth in employment is a positive indicator of the Cypriot economy’s health and its ability to create jobs across various sectors. This trend is particularly significant given the broader global economic context, where many countries are grappling with economic uncertainties and sluggish growth. Cyprus’s ability to not only sustain but also enhance employment levels speaks volumes about its economic strategies and labour market policies.

The sectors leading this growth, particularly Administrative and Supporting Services, Education, and Accommodation and Food Services, are pivotal to Cyprus’s economic landscape. The robust performance in these areas suggests that the island is leveraging its strengths in service-oriented industries, which are essential for sustainable economic development.

Strategic Insights

For business professionals and entrepreneurs, these statistics offer valuable insights into the Cypriot market. The growth in Administrative and Supporting Services indicates a thriving business environment, with increased demand for professional services and corporate support functions. Similarly, the rise in employment within the Education sector highlights the importance of investing in human capital and the potential for growth in educational services and institutions.

The surge in the Accommodation and Food Service sector is indicative of Cyprus’s strong tourism industry. As a key driver of the economy, the continued expansion of this sector presents numerous opportunities for investment and business development.

The International Monetary Fund (IMF) has urged Cyprus to take decisive action to address the persistent issue of non-performing loans (NPLs), highlighting it as a critical factor for the island’s financial stability. While commending Cyprus for its economic recovery and fiscal discipline, the IMF emphasised the need for reducing public debt and maintaining primary surpluses until the debt-to-GDP ratio falls below 60%.

Persistent NPL Challenge

Despite significant progress in recent years, NPLs remain a substantial concern for Cyprus’s banking sector. The IMF advised Cypriot authorities to leverage the newly amended foreclosure framework and the “Rent-to-Own” scheme to accelerate the resolution of these problematic loans. This is especially pertinent in the current economic climate, influenced by the repercussions of the Ukraine conflict, sanctions, and rising interest rates.

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The high percentage of NPLs poses potential risks that could undermine the country’s financial stability. Effective management of these loans is crucial to prevent adverse impacts on the banking sector and the broader economy.

Banking Sector and Economic Implications

The Ministry of Finance has echoed these concerns, noting the risks posed by the banking sector’s developments in its strategic fiscal policy framework for 2025-2028. Although strong capital positions and excess liquidity support the banking system, the persistent issue of NPLs requires ongoing attention and comprehensive solutions.

Furthermore, the IMF underscored the importance of improving oversight of semi-governmental organisations and addressing deficits in the State Health Services Organisation (SHSO). The state’s financial support for SHSO, particularly strained by the pandemic, remains a critical fiscal issue.

Strategic Recommendations

For business professionals and investors, the IMF’s recommendations highlight key focus areas within the Cypriot economy. The call for robust action on NPLs suggests opportunities for investment in financial services aimed at loan recovery and restructuring. Additionally, reforms in the healthcare sector could present prospects for private sector involvement and investment in healthcare infrastructure and services.

The IMF’s emphasis on maintaining fiscal discipline and reducing public debt indicates a stable macroeconomic environment conducive to long-term investments. Entrepreneurs and business leaders should consider these dynamics when planning their strategies in Cyprus.

In a bid to enhance its tourism appeal, the Deputy Ministry of Tourism in Cyprus has introduced the “Historic Hotels of Cyprus” label. This initiative aims to identify and promote hotels and tourist accommodations that possess significant architectural and historical value.

Aims and Objectives

The primary goal of the “Historic Hotels of Cyprus” label is to enrich the island’s tourism product by highlighting establishments that embody the rich historical heritage of Cyprus. By doing so, the initiative seeks to improve Cyprus’s image as a tourist destination, preserve its architectural heritage, and boost local economic development.

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Criteria for Classification

To qualify for the “Historic Hotels of Cyprus” label, an establishment must meet several criteria. The building or part of it must be at least fifty years old and feature architecture representative of its original period of construction. Additionally, hotels must exhibit items of historical significance, such as furniture, artworks, and heirlooms, and offer menus that include traditional Cypriot dishes and drinks.

Applicants must hold a valid license from the Deputy Ministry of Tourism or comply with relevant legal provisions. The label, valid for three years, mandates ongoing compliance with these criteria, ensuring that these historic establishments maintain their unique charm and historical integrity.

Economic and Cultural Impact

This initiative not only aims to attract tourists seeking unique, culturally rich experiences but also catalyzes the preservation of Cyprus’s architectural and cultural heritage. By promoting hotels that reflect the island’s history, the Deputy Ministry of Tourism hopes to create a distinct niche within the hospitality sector that can draw visitors year-round, thereby supporting sustainable tourism and economic stability.

Strategic Importance

For business professionals and entrepreneurs, the “Historic Hotels of Cyprus” label presents an opportunity to invest in and develop properties with historical and cultural significance. Such investments can enhance the tourism sector’s diversity and appeal, attracting a broader range of visitors interested in heritage and culture.