Cyprus Composite Leading Economic Index (CCLEI) recorder a year-over-year decline in March, marking a negative growth rate of 0.9%. This downturn follows a marginal increase of 0.2% in January and a decrease of 0.6% in February of the same year, according to the latest data released by the Economics Research Centre (CypERC) of the University of Cyprus.
According to a CypERC press release, the fluctuation in CCLEI growth mirrors the volatility and uncertainty prevailing in the international economic and geopolitical landscape. The ongoing conflict between Russia and Ukraine, coupled with military tensions in the Middle East, has heightened global uncertainty, significantly impacting Cyprus compared to the previous year.
In March 2024, both the Economic Sentiment Indicators (ESI) for the euro area and Cyprus recorded negative year-over-year growth rates. However, Cyprus experienced a more pronounced deterioration compared to the euro area, indicative of heightened economic uncertainty within the island nation
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Several factors contributed to the negative growth of CCLEI in March. Notably, a decline in property sales contracts and an increase in the international Brent Crude oil price played significant roles. The escalation in oil prices, for the first time since December 2022, exacerbated the negative growth trend.
Although domestic components of CCLEI moderated the overall decline, recent geopolitical tensions in the Middle East pose further challenges. The flare-up in the region is anticipated to impact oil prices and inflation, consequently affecting the CCLEI growth rate in the short term.
According to CypERC, the CCLEI growth and the development prospects of the Cypriot economy are highly dependent on the international economic and geopolitical environment, with the year-over-year CCLEI growth rate noting a decline in March 2024.
Source: Cyprus News Agency