Economic climate in Cyprus improves following a two-month significant drop due to Covid-19
Economic sentiment in Cyprus marked a 2.3 point increase in June following significant reductions in the last two months, affected by the lockdown measures to curb the spread of the coronavirus epidemic, the University of Cyprus’ Economic Research Centre (ERC) has said.
The Economic Sentiment Indicator (ESI-CypERC) rose to 75.2 units in June from 72.9 in the previous month. In March and April, the ESI marked a steep decline of 26 units affected by Covid-19.
“The increase in ESI-CypERC was driven by confidence gains in all sectors, except in construction, as well as by improvements in consumer confidence,” the ERC said.
However, the ESI remains significantly lower compared with the pre-Covid levels. The Services Confidence Indicator rose marginally as the upward revisions in demand expectations were almost offset by the deterioration in firms’ assessments about their recent performance.
The Retail Trade Confidence Indicator rose due to firms’ more favourable assessments of their stock levels and upward revisions in sales expectations.
According to the ERC, the Construction Confidence Indicator remained unchanged as more optimistic employment expectations were offset by worsening assessments of the levels of order books, the ERC added.
Less adverse assessments of the current levels of order books and upward revisions in production expectations, pushed the Industry Confidence Indicator upwards.
The increase in the Consumer Confidence Indicator reflected less pessimistic views on all three forward-looking components, namely household financial condition, economic conditions in Cyprus and expenditure on major purchases, the ERC said
“Although business and consumer expectations improved in June, uncertainty in all sectors and households increased vis-à-vis a similar period in 2019,” the ERC added, noting that uncertainty among firms in services and consumers rose further in June.