Stavros Ioannou: The Cypriot economy is on a growth path, professional services are on the rise

Considering that the economic environment in 2024 will be full of challenges, the CEO of Grant Thornton Cyprus, Stavros Ioannou, says it is crucial for businesses not to be trapped in introversion due to the constantly evolving conditions and calls on them to realise the criticality of investments in innovative solutions and technology in order to strengthen their extroversion and competitiveness.

Speaking to InBusinessNews as part of its IN Business Forecasting 2024 series, Ioannou expresses the belief that the Cypriot economy is now on a significant development path, in light of the recent upgrades, as well as with the announcement of the government’s new support programs in a fiscal context.

Focusing particularly on the Recovery and Resilience Plan, the CEO of Grant Thornton Cyprus emphasises that through its implementation our country can be shaped into a business environment that strengthens its growth and resilience in the face of potential challenges.

Stavros Ioannou estimates that the professional services sector will continue its upward trajectory in 2024, a year which, as he predicts, is expected to bring about significant new trends and changes in the sector.

As far as Grant Thornton Cyprus is concerned, the CEO of the company underlines that it has been on a growth trajectory for the last few years, and this is predicted to continue in 2024.

Special mention is made of its recent strategic cooperation with its offices in Ireland and the United Kingdom, with Ioannou expressing the belief that this cooperation will make Grant Thornton the leading company in the field of consulting services, both in Cyprus and abroad.

How do you see the economic environment shaping up in 2024, in light of inflationary pressures, high interest rates and unpredictable ever-changing geopolitical developments?

There is no doubt that the economic environment in 2024 will be full of challenges. This is due to high inflation, increased interest rates and general uncertainty arising from geopolitical developments.

But based on the most recent survey by Grant Thornton International which measures the levels of business optimism, it seems that there was a recovery trend in 2023. Now, with the latest geopolitical developments, it is anticipated that the investment intentions of companies will again be affected.

However, I believe that especially now, due to the ever-evolving circumstances, it is crucial for businesses not to fall into introversion.

On the contrary, they must realise the criticality of investing in innovative solutions and technology in order to strengthen their extroversion and competitiveness.

What do you consider to be the biggest and most difficult challenges that the Cypriot economy will have to face?

I believe that the biggest and most difficult challenges that the Cypriot economy may have to face include problems of economic insecurity, dependence on tourism, the need for innovation and the promotion of institutional changes to address environmental challenges.

Unwanted fluctuations in the international financial markets have an impact on the Cypriot economy and the fact that our economy is still heavily dependent on tourism is a challenge due to the potential upheavals in this sector.

At the same time, the need for innovation and the adoption of new technologies becomes necessary to strengthen competitiveness, while environmental challenges are an important part of the discussion. Addressing these challenges is not something that will come with just one solution.

On the contrary, I believe that it requires strategic thinking, a willingness to innovate and cooperation with all agencies both in government and in business to ensure a resilient and sustainable economy.

Cyprus is on an important development path

Would you say that, taking into account the latest upgrades, the Cyprus economy is now well on its way to growth?

In light of the recent upgrades as well as the announcement of the government's new fiscal support programs, I can say that the Cypriot economy is now on a significant growth path.

In particular, Cyprus’ Recovery and Resilience Plan for the period 2021-2026, which is financed by the Recovery and Resilience Mechanism of the European Union, represents a critical tool for achieving long-term sustainability and resilience in the economy of Cyprus.

This program enables the implementation of strategic initiatives focusing on complex issues such as digital transition, green growth, and strengthening education and skills. The implementation of the plan strengthens the economic structure, promotes innovation, and ensures the competitiveness of Cyprus in an international context.

In this way, Cyprus can shape itself into a business environment that enhances its growth and resilience in the face of potential challenges.

Upward trend for professional services

What do you think will be the course of the sector in which you operate in 2024?

I estimate that the professional services sector will continue its upward trajectory in 2024. The increased need for specialised services in areas such as tax consulting, consulting services, technology services, legal services, audit services and others will contribute to the growth demand.

Continued globalisation and increased demands on business regulation and compliance will require specialised professional services, while digital technology will play a key role in improving performance and competitiveness.

At the same time, the continuous evolution of the legislative frameworks will create opportunities for the provision of modern professional services.

What are the biggest industry trends/changes you anticipate in 2024?

2024 is expected to bring about significant new trends and changes in the professional services sector.

An era of digital transformation is emerging, with businesses investing in digital tools to improve performance and competitiveness.

Constant legislative changes are causing increased demand for specialised legal services, while growing attention to sustainability and social responsibility is driving businesses towards new challenges.

The need for expertise is increasing as our teams will be called upon to deal with complexities in legal, tax and regulatory matters. At the same time, the flexibility of work and the increase in telecommuting affect the way of working, while the need for adaptability and innovation is highlighted.

Professional services firms that understand and adapt to these developments are expected to maintain their competitiveness in the dynamic market.

Strengthening human capital is a challenge

What are the most significant problems that are currently plaguing your sector and the solution of which you consider to be a priority in view of the new year?

Perhaps one of the main challenges we face is strengthening our human capital. Finding and retaining high-level talent is a strategic priority for our organisation, as the expertise and experience of professionals directly affects the quality of the services we provide.

The competitive nature of the labor market and the rapid changes in the needs of professional services require continuous efforts to attract and skillfully develop our people.

For us at Grant Thornton Cyprus, creating an attractive work environment, promoting continuous training and development, as well as recognising the achievements of our people are key pillars for maintaining our human capital and a key way to address this challenge.

Proposals around the subject of taxation

If you could ask the government to take specific measures or formulate policies to support/enhance your sector, what would they be?

If I were given the opportunity to ask for specific measures or to recommend policy adjustments from the government to support our sector, I would focus precisely on the recommendations that The Institute of Certified Public Accountants of Cyprus recently submitted to the Finance Minister.

In particular, I would like to refer to the proposals surrounding the topic of taxation, emphasising the need to create a Tax Council, which will have the key role of bridging communication between the Ministry of Finance and the Tax Department, as well as shaping our tax policy.

Then, I would propose the global revision of the tax system by drawing knowledge and advice from international consultants. This reform must take place in a fully digitised environment while at the same time supporting planning for the long-term sustainable development of our economy.

I believe that the correct reform of our tax framework will also improve the position of our island among the attractive destinations for foreign investors.

Another equally important area that I believe is important for the government to focus on is the implementation of the goals under our 'Vision 2035' national strategy.

Specifically, I would suggest that implementation efforts be coordinated so as to facilitate economic development.

I believe that if emphasis is placed on sectors that have greater development prospects, while at the same time implementation is monitored, we will be able to have a positive development and as a result achieve the goals set in our national strategy.

Grant Thornton Cyprus in 2024

What are your organisation's plans/strategy for 2024? Should we expect new products/services/developments and your further consolidation in the market?

Without being able to reveal too much, our company has been on a growth trajectory in recent years.

This is how it is predicted to continue in 2024. Our primary goal is to continue to provide the highest quality services to our clients and to be able to offer innovative solutions using Grant Thornton's global network.

In this context, however, we try to maintain our unique culture that makes our organisation stand out.

At the same time, I believe that our recent strategic cooperation with our offices in Ireland and the United Kingdom will make us the company par excellence in the field of consulting services, both in Cyprus and abroad.

This partnership foresees great growth for our company in Cyprus as it places us in a privileged position to provide high quality consulting services and solve complex issues, while at the same time it will offer unique expertise for our teams.

The role of technology is critical

What role does technology, such as artificial intelligence, play and what changes is it expected to bring about in your field?

There is no doubt that technology, and especially artificial intelligence, plays a critical role in our field and is predicted to bring significant changes.

Applying artificial intelligence to professional services can enhance efficiency and accuracy in data analysis, predicting trends and providing strategic recommendations.

It is worth noting, however, that the regulatory framework surrounding this technology has not yet been defined. So it remains to be seen how exactly it will integrate into our domain.

At this point, however, I want to emphasise that while this technology is expected to change the way we work, I do not believe that it will replace the human factor, but will act as a tool that offers the possibility for our partners to focus on more advanced and complex issues.

Its integration will enable our teams to work more efficiently and effectively, avoiding mistakes and allowing our partners to focus on more complex issues.

In conclusion, I believe that artificial intelligence will become an integral part of our work, but exactly how it will be integrated is something that we cannot say with certainty.

(Source: InBusinessNews)