CCLEI remains positive but decelerating in Q4, 2023
07:31 - 23 January 2024
The year-over-year growth rate of the Cyprus Composite Leading Economic Index (CCLEI), constructed by the Economics Research Centre (ERC) of the University of Cyprus, remains positive, albeit decelerating throughout the last quarter of 2023.
The ongoing slowdown of the CCLEI underlines the challenges posed by a burdened geopolitical and unstable economic environment to the growth prospects of the Cypriot economy, ERC notes.
The Economics Research Centre points out that the unfolding military conflicts in Israel since October have exacerbated the already adverse international geopolitical environment, inevitably exerting a negative impact on the CCLEI throughout the last quarter of 2023.
In particular, it suggests that the escalation of geopolitical tensions affects negatively the Economic Sentiment Indicator (ESI) in the euro area, which preserves a negative year-over-year growth rate in December 2023 as well.
In contrast, the positive year-over-year growth rate of the CCLEI in December can be attributed to both the decline in the international oil price and the growth of various domestic sectors, including real estate, tourism, retail trade, and electricity production.
The CCLEI recorded a year-over-year increase of 1.5% in December 2023, following the year-over-year increases of 1.8% and 1.9% recorded in November and October 2023, respectively, based on recent and revised data.
The CLEI Index is designed to provide early warning signals for the turning points of business cycles i.e., early evidence of the turns in economic activity. This Index comprises of several leading economic activity variables whose changes tend to lead the changes in the overall economic activity and which are evaluated on a regular basis.
The leading variables for CCLEI have been selected from a large pool of domestic and international leading indicators and are the Brent Crude oil price, the Economic Sentiment Indicator (ESI) in Cyprus and the euro area, the total number of property sales contracts, the tourist arrivals, the value of credit card transactions, the retail trade sales turnover volume index, and the volume index of electricity production.