Economic sentiment in Cyprus weakened in February 2026, as the Economic Sentiment Indicator (ESI-CypERC) fell by 1.3 points compared with January, reflecting softer business confidence in services and a decline in consumer confidence.
According to the latest Business and Consumer Surveys, the drop in the overall indicator was mainly driven by a deterioration in the Services Confidence Indicator. Firms in the sector reported weaker assessments of their recent performance, particularly regarding their business situation and turnover. However, turnover expectations for the coming months improved, partly offsetting the negative evaluations of current conditions.
In contrast, confidence strengthened in other sectors of the economy. The Retail Trade Confidence Indicator rose, supported by improved assessments of current stock levels and more optimistic sales expectations. Similarly, the Construction Confidence Indicator increased, as firms reported stronger order book levels and revised their employment expectations upwards.
The Industry Confidence Indicator also recorded gains, reflecting more favourable views on current order books and improved production expectations.
Consumer confidence, however, moved lower in February. The decline was attributed to worsening expectations about households’ future financial situation and a further weakening in intentions to make major purchases. Despite this, consumers continued to assess their recent financial situation in highly positive terms.
Meanwhile, the Economic Uncertainty Indicator for Cyprus increased during the month. The rise was driven by higher consumer uncertainty and greater business uncertainty across most sectors, with the exception of construction. However, overall economic uncertainty remained low compared with its historical average, particularly among consumers and firms operating in the services and construction sectors.
(Source: CNA)
