“As part of our ‘All In’ strategy, AI is at the heart of our services. We leverage EY’s global ecosystem of partnerships to support businesses in redesigning their operations, implementing a comprehensive AI-first approach. Technology is already transforming critical areas such as Audit and Tax, enhancing quality, speed and accuracy through automation and intelligent data analysis,” Ronald Attard, Country Managing Partner, EY Cyprus, points out in an interview with InBusinessNews, as part of the INBusiness Forecasting 2026 series.
Describing the new tax reform as "one of the most significant changes in the modern economic history of Cyprus," he explains that its implementation will facilitate business activity and remove disincentives for cross-border development, "while aligning with European priorities for recovery and resilience, incorporating principles of sustainability, innovation and social balance."
Attard further notes that the reform "creates the conditions for a substantial redefinition of the economic framework and strengthens the country's position on the international investment map" and that, if implemented consistently and strategically, it can act as a lever for upgrading the Cypriot economy.
How do you think the Cypriot economy will perform in the new year and what are its prospects? What do you consider to be the biggest risks and how can they be addressed?
The Cypriot economy has repeatedly proven that it can adapt and grow even in the most challenging conditions. It has demonstrated that it has the necessary resilience to respond to both endogenous and exogenous factors and situations, which it did in 2025, achieving growth of around 3.2%, exceeding all forecasts, a performance that was recognised by the international rating agencies Fitch and Moody's through their recent upgrades.
Based on the Ministry of Finance's estimates and given that the economy continues to demonstrate this dynamic stability and resilience, we believe that a positive and stable growth path will be maintained in 2026. This is also confirmed by the official forecasts, according to which the fiscal balance is expected to be in surplus at 3% of GDP, despite extraordinary expenditures such as the Cyprus Asset Management Company (KEDIPES)-Hellenic Bank agreement, the grant to the Natural Gas Public Company (DEFA) for the LNG terminal and the extension of reduced VAT on electricity.
However, it is imperative to maintain a restrained and realistic attitude. Despite the positive outlook, in recent years we have been operating in an unpredictable, constantly changing environment, with unprecedented developments and significant challenges. Therefore, in the new year, we must be even more ready and prepared to manage international risks and geopolitical tensions, energy price increases, uncertainty in global trade, but also domestic challenges, such as potential pressures on public revenues, high interest rates and risks within the financial system.
Effectively addressing these risks requires fiscal discipline, strengthening banking resilience, accelerating reforms and the strategic diversification of the economy, to ensure that the country's growth path remains sustainable and stable.
How do you anticipate your company's sector of activity will develop in 2026? What are the biggest trends/changes you expect to occur and what are the most significant challenges?
The professional services sector is expected to enter a period of deeper transformation, as the rapid development of emerging technologies and the widespread integration of artificial intelligence (AI) redefine operating models, processes and required skills.
AI, enhanced quality control, sector specialisation and strategic alliances are key factors for the resilience and sustainable growth of our industry. At the same time, the work environment is changing rapidly, making attracting and retaining talent one of the most important challenges of the coming year. The professional of the future needs continuous skill development and adaptability, and as professional service providers, we must focus even more on upgrading and empowering our people, investing in a culture of continuous learning and in comprehensive upskilling and reskilling programs that also enhance technological readiness.
A strong trend that seems to be taking hold in Cypriot business is that of acquisitions and mergers. Will we see it strongly in your sector as well?
The trend of acquisitions and mergers has now become established both in the Cypriot market and internationally, and is expected to continue to strongly influence the professional and advisory services sector. In recent times, we have seen significant movements in the services sector, following a European and regional dynamic that remains resilient despite economic and geopolitical pressures. It is characteristic that in the wider Central and Eastern European region there is a shift towards fewer but higher value transactions, a practice that indicates a strengthening of strategic targeting and a preference for quality over volume.
These transactions focus on key strategic objectives related to the acquisition of talent and specialised expertise, the expansion of the service portfolio, the creation of synergies, access to new customer relationships and expansion into new geographic markets. At the same time, we observe that investors are increasingly focusing on investments related to digital transformation, next-generation technologies, infrastructure projects and energy transition, trends that are also reflected in the Cyprus market.
The prospect of further acquisitions and mergers is also fuelled by the need for companies to maintain their competitive advantage in a rapidly changing environment. CEOs worldwide are recognising that traditional strategic planning and portfolio review processes are no longer sufficient, as they are often passive and conservative. Therefore, they are developing more agile and proactive approaches, strengthening strategic alliances, partnerships and targeted divestments.
In this environment, M&A activity is expected to remain elevated in the coming months, with companies seeking not only partnerships but also new sources of growth and capital. For our industry, acquisitions and strategic partnerships will continue to be a driver of growth, strengthening technological capabilities and acquiring specialised skills required in the world of AI, data analytics and transformation.
What can we expect in terms of your organisation's plans and growth and expansion strategy in 2026? What moves do you intend to make in this direction?
For 2026, we are focused on maintaining our culture as an agile, technologically mature and human organisation – an organisation that strengthens its capabilities, elevates the customer experience and meaningfully supports the communities in which it operates.
As part of our ‘All In’ strategy, AI is at the heart of our services. We leverage EY’s global ecosystem of partnerships to support businesses in redesigning their operations, implementing a comprehensive AI-first approach. Technology is already transforming critical areas such as Audit and Tax, enhancing quality, speed and accuracy through automation and intelligent data analysis.
As more procedural tasks are digitised, our teams can focus on higher-value tasks like strategic guidance, critical thinking, and more meaningful client engagement. We are investing in our people, expanding access to modern learning platforms and future-proof skills development programs to empower our people as they evolve with technology. At the same time, we are supporting a culture of diversity, inclusion, and empathetic leadership that are the foundation of EY globally.
The new year has seen the implementation of the tax reform, which is taking place 22 years after the previous tax reform. How do you anticipate that it will affect the Cypriot economy, businesses, and the attraction of foreign investments?
The new tax reform is one of the most significant changes in the modern economic history of Cyprus. Its implementation will facilitate business activity and remove disincentives for cross-border development, while aligning with European priorities for recovery and resilience, incorporating principles of sustainability, innovation and social balance.
After two decades, the upcoming reform creates the conditions for a substantial redefinition of the economic framework and strengthens the country's position on the international investment map. If implemented consistently and strategically, it can act as a lever for upgrading the Cypriot economy, maintaining its momentum and attracting new investments.
The reform is also expected to strengthen Cyprus' role as a regional hub for investment and technological development, leveraging its strategic geographical location, while the improvement of the tax environment is likely to also enhance predictability and stability for businesses and investors. The benefits that will be created can include the new communication channel between the state, businesses and academic institutions, aiming to promote policies that support long-term growth and economic transformation.
Finally, it is important to recognise that the success of reform will depend on the country's ability to adapt to rapid international changes and maintain a balance between growth, social justice and fiscal stability.
(Source: InBusinessNews)
