Economic Sentiment in Cyprus Takes a Dip
The Cypriot economy has witnessed a decline in economic sentiment for the second month in a row, as reported by the Centre for Economic Research (CER). The Economic Sentiment Indicator (ESI) experienced a drop of 1.2 units from the previous month, settling at 102.1 units in March. This downturn is attributed to a general deterioration in the business climate, which has spanned across various sectors.
Analysts at the CER highlighted that the primary cause for the ESI’s decline was rooted in businesses bracing for a less active next quarter. Despite this, there was a silver lining with a marginal uptick in consumer confidence. However, this did not translate into an increased willingness to make significant purchases, as intentions for such expenditures dipped in March.
While businesses had a more favorable view of their current economic situation, the service sector’s sentiment suffered due to adjusted expectations for future turnover. Retail trade and construction sectors did not report substantial changes from February regarding their current business situations. Nevertheless, a more pessimistic outlook on future retail sales and employment in construction contributed to weaker sentiment within these areas.
The manufacturing sector also faced challenges, with sentiment waning due to negative perceptions of inventory levels and production forecasts for the upcoming quarter. On a more positive note, consumers showed some recovery from their February pessimism, leading to an increase in consumer confidence in March. This improvement was seen in their less negative assessment of both their current and future economic situations and an upward revision of their expectations for Cyprus’s economy.
Despite these positive adjustments in consumer outlook, expectations still lagged behind those recorded in March of the previous year. Additionally, the Economic Uncertainty Index saw a decrease to 29.5 units, yet it remained above the level seen at the same time last year, reflecting ongoing concerns about economic stability.
