Cyprus ranks 44th out of 69 countries in the 2025 IMD World Competitiveness Ranking, moving down one place compared to 2024, according to a press release issued by the Economics Research Centre (CypERC) of the University of Cyprus on Wednesday.

The decline in the competitiveness ranking resulted from a deterioration in economic performance, mainly driven by changes in international investment, and from growing weaknesses in the country’s infrastructure, particularly its basic infrastructure.

However, Cyprus’s position in the 2025 ranking improved in terms of government efficiency and business efficiency.

According to CypERC, the deterioration in almost all components of international investment, especially those concerning the country’s direct investments abroad, negatively affected economic performance, pushing Cyprus lower in the overall 2025 competitiveness ranking. 

As noted in the 2024 assessment, where international investment components had a positive impact, the high volatility of investment flows from year to year influences the country’s overall ranking.

In contrast, aspects such as infrastructure take on greater significance, as they are less affected by external factors. In 2025, there was a further decline in nearly all components of basic infrastructure, resulting in Cyprus receiving its lowest infrastructure rating since it began participating in the ranking in 2017. 

This year’s assessment, the CypERC said, "highlights, more starkly than in previous years, accumulated deficiencies in energy infrastructure, energy production, electricity costs, the quality of air transport, and the management of water resources and cities."

This year’s drop in Cyprus’s overall competitiveness ranking was partly offset by improved evaluations in terms of government efficiency and business efficiency. 

Cyprus’ position in government efficiency was supported in 2025 by, among other things, strong fiscal performance and the strengthening of the institutional framework, despite weaknesses in areas such as the justice system, transparency, and bureaucracy. 

The rise in business efficiency this year was due to improvements in financing issues, as well as aspects related to business values and management practices.

CNA/MCH/EPH/2025

ENDS, CYPRUS NEWS AGENCY