The Cyprus economy's primary structural weakness is low productivity, according to the Cyprus Competitiveness Report for 2025. Professor Sofronis Clerides, who led the research team, highlighted the need for Cyprus to attract more greenfield and productive investments that generate quality jobs and facilitate knowledge transfer. While traditional economic indicators like growth, employment rates, and foreign worker inflows remain strong, they no longer fully capture competitiveness.

The report also emphasized the importance of increasing productivity and improving conditions for business growth. Current foreign investments largely consist of company relocations and acquisitions rather than new business setups that create economic value. Cyprus faces challenges attracting greenfield investments due to its small market, labor force, and infrastructure limitations.

Professor Clerides noted that despite healthy economic indicators, there is complacency among governments, and a lack of a clear strategy for attracting the most beneficial investments. To advance, Cyprus requires a visionary government that can implement reforms to streamline public administration, modernize education, and foster sustainable economic progress beyond relying primarily on tourism and construction.