The accountancy profession develops and shapes in the way the overall economy performs. Hence our sector is expected to trail the course set by the main economy drivers. Opportunities could be sought in the funds industry, the tax and other consulting services, the digital transformation of the economy and society.
What key areas of opportunity or growth do you see in your sector, and what are your expectations for Cyprus in 2020?
The Cyprus economy has been steadily growing over the last few years, overcoming the predicament of 2013 and the consequential crisis. This has gradually brought back stability in the market, an increase in business activity and facilitated better ratings for the country by credit rating agencies. Unemployment has been reduced, whilst the overall burden of the non-performing loans still haunts the banks’ portfolios. Land development and tourism industries have shown a remarkable comeback. The overall growth rate of the economy has been steadily above 3% during the last three years.
In my opinion, 2020 will be a more challenging year. The sectors that elevated growth in recent years are expected to face challenges while their upward trends might require assistance if the same direction is to be maintained. On the other hand, it is not clear whether any other specific sector would emerge to boost economic growth.
In addition, the application of strict compliance measures in the financial services industry will be kept at the same level in 2020, given that the country will have to comply with various recommendations made by Moneyval in its last mutual evaluation report.
An important yet unknown factor for 2020 will be Brexit and its repercussions, since it is likely to affect an array of business and trade areas, including those of exports and tourism.
On the other hand, my estimation is that given the fair score in the Moneyval report coupled with an anticipated fair outcome in the OECD evaluation for Tax Transparency and Exchange of Information, Cyprus’ credibility as a solid and trustworthy jurisdiction will be enhanced, resulting in a potential flow of business and FDI from abroad. Hopefully, this could also have a positive impact on the corporate services sector. For the latter, it would be important to open up new avenues of cooperation with other countries.
One of the more promising sectors is investment funds. There is a lot of potential however it is still at a very early stage and the fruits are likely to be yielded in the coming years. I would anticipate that the contribution of the shipping and agricultural sectors will be greater this year, as well as the tourism sector, provided some amendments are made. Finally, facilitating the establishment of new companies and the application of more technologically advanced tools and digitalised systems could also prove beneficial.
Apart from the above, a factor that might make a difference in the economy in 2020 would be the implementation of the much-needed structural reforms, facilitating efficiency, the attractiveness and the ease of doing business both for local and foreign business in Cyprus. This could lead to the strengthening of competitiveness for the whole country, resulting in horizontal positive consequences.
The accountancy profession develops and shapes in the way the overall economy performs. Hence our sector is expected to trail the course set by the main economy drivers. Opportunities could be sought in the funds industry, the tax and other consulting services, the digital transformation of the economy and society. Furthermore, business opportunities could also arise from the restructuring of the public sector and possible mergers of smaller entities both in the accountancy business and the economy in general.
My overall estimation is that the economy will perform with a positive prefix for 2020, but our efforts should be focused on the goal of long-term sustainable development.