Economic uncertainty in Cyprus hits three-year low

In June, economic uncertainty in Cyprus decreased to a three-year low.

Uncertainty declined among consumers and in all sectors, except for retail trade.

According to a press release by the Economics Research Centre of the University of Cyprus, in June 2023, the economic sentiment in Cyprus witnessed significant improvement as the Economic Sentiment Indicator (ESI-CypERC) increased by 4.3 points compared to the previous month.

The rise was primarily driven by increased confidence in the services sector and among consumers.

The Services Confidence Indicator experienced a strong increase, driven by improved views on past performance, including demand and business situations. Additionally, there were modest upward revisions in demand expectations.

The Retail Trade Confidence Indicator showed a marginal rise, attributed to more favourable assessments of current stock levels and upward revisions in sales expectations. Despite a slight decline in firms' assessments of recent sales, the overall sentiment remained positive in the retail trade sector.

The small decrease in the Construction Confidence Indicator resulted from a deterioration in both of its components. More specifically, in June, firms’ assessments of the level of order books worsened and employment expectations moved down. 

The marginal increase in the Industry Confidence Indicator was due to improved views on the stocks of finished products and more optimistic production expectations, despite a deterioration in firms’ assessments of the levels of order books. 

The increase in the Consumer Confidence Indicator resulted from improvements in all of its components. In June, consumers assessed their recent and future financial situation more favourably, and revised their expectations about the economic conditions in Cyprus upwards. Moreover, consumers’ intentions to make major purchases over the next months strengthened markedly.

(Source: CNA)