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DBRS Revises Cyprus Growth Projections: 2.7% in 2024 and 2.5% in 2025

by THEFUTURE.TEAM

In a recent report, DBRS Morningstar, a prominent global credit rating agency, has adjusted its growth projections for Cyprus, forecasting a 2.7% growth rate in 2024 and a slightly lower 2.5% for 2025. This revision underscores the nuanced economic trajectory of Cyprus, which balances optimism with caution amid global economic headwinds.

The revised growth figures indicate a tempered but steady expansion for the Cypriot economy. DBRS Morningstar’s adjustments reflect both external and internal factors influencing the nation’s economic landscape. On one hand, global economic uncertainties, including fluctuating energy prices and geopolitical tensions, present significant challenges. On the other hand, Cyprus’s robust recovery post-pandemic and strategic economic reforms contribute positively to its growth outlook.

One of the critical drivers of Cyprus’s economic growth is its thriving tourism sector, which has recently seen a substantial increase in tourist arrivals. As reported by Cyprus Business News, the island welcomed 3.85 million tourists in 2023, a 20.1% increase compared to the previous year. This surge has injected much-needed revenue into the economy, supporting various ancillary industries such as hospitality, retail, and transportation.

Additionally, Cyprus has been focusing on diversifying its economic base. Efforts to bolster sectors like information technology, financial services, and renewable energy are beginning to pay dividends. The government’s strategic initiatives aimed at attracting foreign investment and fostering innovation have created a more resilient economic framework capable of withstanding global shocks.

However, DBRS Morningstar’s cautious outlook highlights some persisting vulnerabilities. The Cypriot economy remains susceptible to external shocks due to its small size and high degree of openness. The dependency on tourism, while beneficial, also poses risks, particularly in the face of global travel disruptions or economic downturns in key source markets. Furthermore, the ongoing geopolitical tensions in the region add a layer of uncertainty that could impact investor confidence and economic stability.

Inflationary pressures also play a role in the revised projections. Rising costs, particularly in energy and food, have a direct impact on both consumers and businesses. The Central Bank of Cyprus has been vigilant in monitoring inflation and implementing policies to mitigate its adverse effects, but the challenge remains significant.

In response to these projections, the Cypriot government has reiterated its commitment to fiscal discipline and structural reforms. The National Reform Programme and the Cyprus Recovery and Resilience Plan are central to these efforts, aiming to enhance competitiveness, digitalisation, and sustainability across various sectors of the economy.

Apple Loses €13 Billion Tax Battle Against EU: A Landmark Decision for Big Tech

by THEFUTURE.TEAM

In a landmark ruling, the European Court of Justice has upheld the European Union’s demand for Apple to pay €13 billion in back taxes to Ireland, marking a significant defeat for the tech giant. This decision sets a major precedent for the regulation of Big Tech companies, as it reaffirms the EU’s commitment to curbing tax avoidance by multinational corporations operating within its borders.

The case, which dates back to 2016, centres around allegations that Apple received illegal state aid from Ireland through preferential tax arrangements. The European Commission argued that these agreements allowed Apple to avoid paying its fair share of taxes on profits generated in Europe, effectively granting the company an unfair competitive advantage. The Commission initially ordered Apple to repay €13 billion, a decision the company contested in court.

Apple’s defence has always hinged on the argument that it followed the tax laws as they were written and that the profits in question were largely attributable to its operations outside of Europe. Despite this, the EU maintained that Apple’s arrangement with Ireland constituted illegal state aid, as it allowed the company to channel significant revenue through the country while paying a fraction of the taxes it would have owed in other jurisdictions.

This ruling is seen as a watershed moment in the ongoing debate around tax fairness and the role of multinational corporations in the global economy. For the European Union, the outcome reaffirms its position as a global leader in the push for corporate tax transparency and accountability. By holding Apple accountable for its tax practices, the EU is sending a clear message to other tech giants, signalling that no company, regardless of its size or influence, is above the law.

The implications of this decision are likely to reverberate throughout the tech industry, with other major corporations potentially facing increased scrutiny over their tax arrangements. In recent years, there has been growing public and governmental pressure to ensure that Big Tech companies contribute their fair share to the economies in which they operate. This ruling could catalyze further regulatory action, both within the EU and globally.

For Apple, the financial impact of the ruling is significant, but perhaps more important is the reputational damage it may suffer. As one of the world’s most valuable companies, Apple has long been in the spotlight for its tax practices, and this decision is likely to reignite debates over corporate responsibility and the ethics of tax avoidance.

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