The Central Bank of Cyprus published a print article by its Governor, “Artificial Intelligence and the Economy in a Sharp Transition”, analysing how rapid advances in artificial intelligence are changing production, labour markets and decision-making across the economy. The article frames AI as a new wave of “creative destruction” that can generate long-term productivity gains while accelerating the displacement of jobs, capital and skills that do not adapt. Drawing on an International Monetary Fund analysis, it notes estimates that around 40% of global jobs could be affected by AI over the next decade, rising to as much as 60% in developed economies, and cites an Oxford survey suggesting 40% of domestic work could be automated. It also references the European Central Bank’s November 2025 Financial Stability Review on persistent risks linked to geopolitical uncertainty, high asset valuations and technological challenges including cyber risk and AI. For Cyprus as a small open economy, the article argues that policy priorities include strengthening reskilling and upskilling mechanisms and supporting groups affected by the transition, alongside timely business-model adaptation by firms and changes for households in work content and access to services such as finance, health and education.
Central Bank of Cyprus 2026-01-17
Central Bank of Cyprus publishes Governor article warning artificial intelligence could affect 40% of jobs and urging reskilling
The Central Bank of Cyprus published an article by its Governor on the transformative impact of artificial intelligence (AI) on the economy, highlighting potential productivity gains and job displacement risks. The article emphasizes the need for Cyprus to prioritize reskilling, business-model adaptation, and support for affected groups amid AI-driven changes.