More than half of Cyprus’s workforce is employed in occupations highly exposed to artificial intelligence, according to the International Monetary Fund. The analysis forms an annex, “The Impact of Artificial Intelligence on Cyprus’s Labor Market”, to the IMF’s 2026 Article IV consultation report on Cyprus. High exposure, however, does not mean that half of all workers will lose their jobs.
What the IMF measured
The IMF uses two measures. Exposure captures how far AI applications overlap with the human abilities an occupation requires. Complementarity captures how likely AI is to support a worker rather than replace them.
The IMF illustrates the difference with two examples. Judges are highly exposed to AI but shielded by societal norms and laws, while clerical workers are highly exposed with little shielding.
Combining the two measures, the IMF places Cyprus’s workforce in three groups, using Eurostat Labour Force Survey data:
- 33% are in jobs with high exposure and high complementarity, where AI is more likely to boost productivity
- 23.4% are in jobs with high exposure and low complementarity, where the risk of AI replacing human work is greatest
- 43.5% are in jobs with low exposure
The IMF puts the share of highly exposed workers at fifty-six percent.
The jobs most at risk
According to the IMF, jobs in business administration, clerical work and ICT are particularly vulnerable, while many lower-skilled roles will be less affected.
Among private firms, those in ICT, finance and professional services face the highest displacement risks.
Who is most exposed
The report identifies notable disparities by gender, education and nationality. Women and highly educated people face both greater exposure and greater displacement risk.
According to figures from the report’s annex, around one in three university-educated workers is in the category at risk of replacement.
Private and public sectors
The gap between the private and public sectors is wide. According to the annex, around 27% of private sector employees are in high-exposure, low-complementarity jobs, compared with about 10% in the public sector. In its main report, the IMF notes that the public sector shows greater potential to benefit from AI integration.
High personal use, low business adoption
The IMF highlights a sharp contrast in Cyprus between high personal use of AI and low adoption by businesses, with less than 10 percent of companies integrating AI technologies.
The Fund’s AI Preparedness Index indicates that Cyprus lags behind its EU peers in innovation financing, human capital and regulation, especially in relation to AI integration. This is despite the National Digital Strategy 2020–25 and the Smart Specialisation Strategy 2023–30.
IMF recommendations
To manage the impact on workers, the IMF recommends upskilling and reskilling, with AI and digital competencies embedded in education and lifelong learning, and particular attention to protecting high-risk groups.
To raise business adoption, it calls for awareness-raising, support for AI uptake among SMEs and greater use of innovation hubs. It also calls for the upcoming AI action plan and an efficient regulatory framework compliant with the EU’s AI regulation.
The government’s view
According to the report, the Cypriot authorities acknowledged digital skills gaps and highlighted training and reskilling efforts. They described AI adoption as a key opportunity to raise productivity, led by the private sector and supported by pro-innovation policies.
The IMF Executive Board concluded the consultation on 17 June 2026, and the report was published as IMF Country Report No. 26/145.
Source: International Monetary Fund, IMF Country Report No. 26/145
