In May 2023, economic sentiment in Cyprus deteriorated, as the Economic Sentiment Indicator (ESI-CypERC) decreased by 1.8 points compared with April 2023, according to the Economic Research Centre of the University of Cyprus. The decrease in the ESI-CypERC primarily resulted from weaker business confidence in services.
ERC notes that the decrease in the Services Confidence Indicator was driven by the deterioration in firms’ assessments of past business situation and past demand, despite the upward revisions in demand expectations.
A small increase in the Retail Trade Confidence Indicator was recorded, due to improved views on the current stock levels and upward revisions in sales expectations, the ERC says.
Moreover, the Construction Confidence Indicator increased slightly, as firms’ assessments of the level of order books improved further. However, employment expectations deteriorated.
The Industry Confidence Indicator increased as a result of improvements in all of its components. In May, manufacturing firms assessed their current levels of order books and stocks of finished products more favourably, and revised their production expectations upwards.
Additionally, the Consumer Confidence Indicator declined marginally. In May, consumers’ views on the recent and future financial situation of their households worsened, while consumers’ expectations about the general economic conditions in the country improved.
Overall, according to ERC, in May, economic uncertainty in Cyprus decreased slightly, as a result of the lower uncertainty levels observed in the sectors of services, retail trade and construction. Uncertainty among manufacturing firms and among consumers increased in May.
Source: Cyprus News Agency