A leading indicator, used to predict the future direction of economic movements in Cyprus, turned marginally positive in May, halting the negative year-on-year growth of the index observed in the past three months.
The Cyprus Composite Leading Economic Index (CCLEI), estimated by the Economics Research Centre (CypERC) of the University of Cyprus, recorded a year-over-year increase of 0.1% in May, following the annual decreases of 0.2%, 0.4% and 0.4% in April, March and February, respectively, according to recent and revised data.
Factors Influencing the CCLEI
The positive estimate of the CCLEI in May is mainly due to the year-over-year growth of several domestic variables. Specifically, tourist arrivals in Cyprus, credit card transactions, retail sales volume, and the temperature-adjusted electricity production volume – contributed to the growth of the CCLEI in May.
The preservation of the Economic Sentiment Indicator (ESI) in May at the same level as in May last year had a neutral effect on the change in the CCLEI. In contrast, the negative growth of the European ESI, combined with the y-o-y increase in the benchmark Brent crude oil price and the decline in the year-over-year growth rate of property sales contracts, restrained the further rise of the CCLEI in May.
Economic Research Centre (ERC) – Department of Economics, University of Cyprus (UCY)
