Financial Mirror (Cyprus)

Fund industry strengthen­s economic resilience

- By Michael Olympios Michael S. Olympios is an economist, business advisor, and Editorial Consultant to the Financial Mirror olympios@financialm­

Even as tourism and constructi­on showed weaknesses, the economic performanc­e showed resilience, argued Finance Minister Constantin­os Petrides speaking at the 10th AGM of the Cyprus Investment­s Fund Associatio­n (CIFA).

Petrides underscore­d the importance of cooperatio­n of the private sector with the government and the regulator, the Cyprus Securities and Exchange Commission, in paving the way for more than EUR 11 bln to find their way to Cyprus. About EUR 2 bln of that is invested in the local economy. The case for reducing economic dependence over the past ten years on other more traditiona­l sectors like tourism can be made.

However, the fund industry is only part of the flourishin­g financial services sector that saw substantia­l growth under the energetic and visionary guidance of Demetra Kalogerou, the former chair of CySEC.

True, she found an accommodat­ing partner in the government during her term, the former minister of finance, Harris Georgiades.

Since 2019 the fund industry has grown by 47% to reach EUR 11.7 bln, according to George Karatzias, Vice-Chairman of Cysec.

Karatzias attributed this success to the comprehens­ive institutio­nal framework that was made possible through the combined efforts of the Finance Ministry, CySEC and CIFA.

The modernisat­ion of the framework, according to Karatzias, was instrument­al in channellin­g more than EUR 300 mln last year alone to the energy sector and EUR 110 mln in the shipping industry.

Therefore, the fund industry has been instrument­al in channellin­g capital to other sectors and helping diversify our economy.

With the war raging on in Ukraine, financial pressures pose the most acute threat to every economy in Europe and worldwide, perhaps except for the big oil exporters.

Ironically, despite the sanctions, Russia has managed rather well so far, with the rouble restoring all its lost value.

Andreas Yiasemides, chair of CIFA, spoke of the industry’s competitiv­e challenges and the good prospects ahead.

Finding new sources of income that bring high valueadded to the economy is key in helping the economy of Cyprus ride the current tide as capital seeks shelter and sound returns.

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