Prolonged drought and water shortages have been identified as the single most serious risk facing the Cypriot economy, according to a new risk assessment survey presented on Monday at the Ministry of Finance.
According to the Cyprus News Agency, the findings were released by the Council of Economy and Competitiveness of Cyprus (SOAK), during a press conference outlining the results of its annual risk assessment, now conducted for the fourth consecutive year.
Presenting the survey were SOAK member Evangelos Tryfonos and Panagiotis Panagiotou, director of research firm Pulse Market Research, which carried out the analysis.
The Cyprus News Agency reported that based on a composite Risk Index combining likelihood and severity, water scarcity and prolonged drought ranked highest among threats to the economy, scoring 91%. They were followed by cyberattacks on critical infrastructure (82%), worsening climate conditions (80%), shortages of specialised labour (80%) and failure of digital transformation (79%), Tryfonos said.
Panagiotou explained that, beyond individual risks, the study grouped threats into four broader categories to better assess their origin and impact. These relate to geopolitical security and external shocks, institutional resilience and structural risks, social and environmental resilience, and macroeconomic stability.
He noted that while the severity of consequences across all risk groups has remained broadly stable, the probability of occurrence shows greater variation. Institutional resilience and structural risks currently rank highest in terms of likelihood.
“This sends a clear message that through preventive measures and targeted actions, negative impacts can be effectively mitigated,” he said.
Asked how the Council’s findings are used in practice, SOAK president Dimitris Georgiadis said the discussion on risks and policy responses does not take place in isolation.
“It is part of a broader effort involving the Ministry of Finance, the Central Bank and the Fiscal Council,” he said, adding that public debate plays a key role in identifying what the economy considers most serious threats.
On digital transformation, Georgiadis said the survey does not attempt to assess what should or should not have been done, but reflects the perception of the business community.
“What the economic community is saying is that digital transformation has not progressed to a satisfactory degree,” he said, citing difficulties in business operations, licensing procedures for labour recruitment and persistent bureaucratic obstacles.
He added that the findings are intended to support dialogue with relevant ministries and services, with the aim of accelerating digital reform.
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