What key areas of opportunity or growth do you see in your sector and what are your expectations for Cyprus in 2020?
The professional services sector in Cyprus has proved to be resilient during the years, being one of the most important pillars of the Cypriot economy. Despite increased regulation and global conjectures such as the US-China trade war, our profession continued on a growth path.
One of the major profession catalysts that cannot be ignored is technology, which has disrupted the form with which services are offered to clients. At KPMG we acknowledge that technology sits at the forefront of future developments and therefore has a key role in our efforts to enhance our professional service offering. We should not be surprised to evidence that a lot of the work we currently perform at clients’ premises will be carried out remotely in the near future. Accessing clients’ systems via the cloud is not far away.
Another important area of development is that of investment funds and fund management. These comprehensive vehicles attract a great deal of investment because they entail specific advantages, such as risk-spreading and access to sizeable investments and projects. Cyprus has become one of Europe’s emerging destinations for investment funds. New legislation put in place in 2018 has enabled the development of AIFs and as a result, the country has managed to attract several funds and fund managers.
As far as the Cypriot economy is concerned, evidence showed that it has continued its positive growth rates, around 3% in 2019; this reflects a minor decline in economic activity compared to last year, mainly due to the continued imposition of restrictive measures on international trade, as well as growing uncertainty regarding external demand.
2020 will be another challenging year for the economy, since it is called upon to maintain not only macroeconomic sustainability, but also a favourable environment for investments, while improving competitiveness through continuous reform efforts. The major challenge faced by the Cyprus economy is the reduction of NPEs in the banking sector. Particular emphasis should be given to attract new forms of tourism (nautical, medical, sport) and careful planning to expand the tourist season all year round. Very promising steps have already been taken, such as the construction of marinas and the gradual operation of the multi-functional casino resort.
For Cyprus to become a robust professional service hub avoiding the risk falling behind the competition, we need to secure those advantages it provides as a business centre and work towards upgrading the services offered to investors and businesses, while fostering the right incentives in order to attract international players headquartering in the island. At the same time, we should be looking at expanding other sectors of the economy such as the film industry, as well as adjusting to the newly-emerged economic model by acquiring the necessary skills, expertise and by developing new ideas. The professional services world, as well as the public sector, will have to adjust even further to this changing economic model.