Filenews 5 January 2025 - by Markos Kallis
As 2024 draws to a close, the business world is focusing on 2025, a challenging year.
Managing unforeseen situations and dealing with ever-changing circumstances is now an integral part of modern reality. Successive geopolitical upheavals, financial crises and unexpected events have shaped a new normal.
In this volatile environment, both the global and European economies are at a critical crossroads. The Cyprus Employers & Industrialists Federation (OEB), recognizing the importance of timely preparation, closely monitors developments, is in constant dialogue with the business world and formulates strategies to address the challenges that the Cypriot economy is expected to face.
In the following paragraphs, we will examine some of the key factors expected to shape the 2025 economic landscape, focusing on the rapid evolution of artificial intelligence, the ongoing geopolitical upheavals and the impending change of baton in the United States Presidency.
The Artificial Intelligence Revolution
Artificial intelligence (AI) is now firmly established as an integral part of everyday life and has transformed the way businesses operate. By providing revolutionary tools for automation, data analytics and innovation, AI offers significant opportunities to improve productivity and competitiveness.
2025 is expected to mark a further acceleration in the adoption of AI by businesses globally, with tech giants strengthening their dominance through continued investment.
The impact of AI is now being felt in all areas of business. From finance, where it is used for automation and risk analysis, to IT, retail, health and manufacturing, AI is transforming processes and creating new possibilities. Even sectors such as marketing, entertainment and the arts are influenced by Creative AI, which mimics the human imagination.
This rapid development also poses challenges for the Cypriot business ecosystem. The need for rapid and timely modernisation in order to maintain competitiveness is imperative. At the same time, staff training and retraining are crucial factors for successful adaptation to new technologies. OEB undertakes initiatives to promote digital training and enhance the digital skills of the workforce. The question about the impact of AI on jobs remains, with occupations that rely on repetitive routine tasks being more vulnerable.
However, in Cyprus, where labour shortages are a reality, upskilling and adapting to new technologies is an opportunity for professional advancement.
Geopolitical Upheavals
The possible continuation of conflicts in the Middle East and Ukraine in 2025 will again put pressure on the global economy. The geographical proximity of Cyprus to these outbreaks makes our island particularly vulnerable to their effects. These conflicts are causing rising fuel prices and energy costs, disruptions in supply chains and instability in sectors vital to the Cypriot economy, such as tourism and investment.
The recent changes in neighbouring Syria, apart from the positive effects they will have on the tormented people of the country, may affect to some extent the workforce of Cyprus, especially in sectors such as the construction industry. However, it is still too early to draw conclusions.
Challenges become opportunities
2025 is expected to be a year full of challenges, but also opportunities for innovation, collaboration and progress. With the right strategy and the active involvement of all stakeholders, Cyprus can address uncertainties and create a sustainable and prosperous economic future.
We said goodbye to 2024 with successive upgrades of the creditworthiness of the Cypriot economy by international rating agencies. OEB will continue to work with dedication to further strengthen the economy, promoting technology, investment and growth. In a spirit of cooperation and optimism, we can take Cyprus even higher, turning the challenges of 2025 into opportunities for a better future.
The New U.S. Presidency
The change of leadership in the United States in January 2025 is expected to play an important role in global developments. The new president's priority on peace and conflict de-escalation could have positive effects on the global economy, bringing stability to energy markets and boosting confidence in markets.
We hope that if geopolitical conditions improve, Cyprus will be able to promote itself even better as a destination for investment, tourism, shipping and trade, with all the consequences for other sectors.
The announced protectionist policies for American products announced by the new US President may create new dynamics in international trade, affecting European exports as well, but these are issues that the European Union will handle through negotiations, as and when there are developments.
- Officer, Business Development Department (OEB)
