Economic Sentiment in Cyprus Takes a Dip
In a recent report by the Centre for Economic Research (CER), it was revealed that the Economic Sentiment Indicator (ESI) in Cyprus has experienced a decline for the second month in a row. The ESI, a measure of the overall economic outlook, fell by 1.2 units to 102.1 in March, compared to the previous month. This downward trend is attributed to a general deterioration in the business climate across various sectors.
The CER highlighted that the dip in sentiment was primarily due to businesses lowering their expectations for activity in the upcoming quarter. Despite this, there was a silver lining as consumer confidence saw a marginal uptick. However, this was tempered by a noted decrease in consumers’ intentions to make significant purchases soon.
Service sector sentiment suffered as businesses revised their turnover expectations for the next quarter downwards, even though they viewed the current economic situation more positively. The retail trade and construction sectors did not report significant changes in their current business situation assessments from February. Yet, a more pessimistic outlook for future retail sales and employment in construction contributed to weaker sentiment.
The manufacturing sector also faced challenges, with sentiment declining due to negative perceptions of inventory levels and production forecasts for the coming quarter. On a more positive note, consumers showed some recovery from their February pessimism, improving their views on both their recent and future economic circumstances and expressing slightly more optimism about Cyprus’s economic future. Despite this improvement, consumer expectations still lagged behind those recorded in March of the previous year.
Adding to the mixed economic picture, the Economic Uncertainty Index saw a decrease to 29.5 units in March. Nevertheless, it remains above the level seen at the same time last year, indicating ongoing concerns about economic stability and the potential for further
