28/07/2015 16:42
Economic sentiment deteriorated in July on Grexit fears and the latest developments in Greece.
According to figures of the Economic Research Centre of the University of Cyprus, economic sentiment in July fell by 3.9 percentage points to 100.3 points from 104.2 points in June.
The decrease is attributable to a deterioration of the business climate in services and in industry, as well as the weakening of the economic confidence of consumers. The index fell to a level below that of July 2014 and returned to its long-term average.
As ERC stressed, the decline in July seems to be associated with the political and economic developments in Greece and may be transient.
The loss of confidence in the services is related to unfavourable assessments of the economic situation and the business demand in the last quarter as well as more pessimistic estimates for the turnover in the next quarter.
Compared with last month, more businesses evaluated negatively the economic situation and the demand of their business in the last quarter. Compared with June, their expectations for the turnover in the next quarter also deteriorated. In July, fewer firms answered that their employment in the last quarter has increased, while the expectations for the number of employees in the next quarter were more unafourable compared to last month.
The deteriorating climate in manufacturing emerges from reduced current orders and estimates for reduced production for the next quarter.
The loss of consumer confidence came from more pessimistic estimates for the number of unemployed persons in Cyprus and from a lower chance of saving in the next 12 months.
In July, fewer consumers evaluated the current period as appropriate for large purchases while fewer intend to make such purchases in the next 12 months. Although fewer consumers than in June characterize the current period as unsuitable for savings, the number of those who answered that the potential savings over the next 12 months is remote, recorded an increase.
The climate in retail trade recorded a marginal improvement while in constructions it remained unchanged at the negative level of June.
According to figures of the Economic Research Centre of the University of Cyprus, economic sentiment in July fell by 3.9 percentage points to 100.3 points from 104.2 points in June.
The decrease is attributable to a deterioration of the business climate in services and in industry, as well as the weakening of the economic confidence of consumers. The index fell to a level below that of July 2014 and returned to its long-term average.As ERC stressed, the decline in July seems to be associated with the political and economic developments in Greece and may be transient.
The loss of confidence in the services is related to unfavourable assessments of the economic situation and the business demand in the last quarter as well as more pessimistic estimates for the turnover in the next quarter.
Compared with last month, more businesses evaluated negatively the economic situation and the demand of their business in the last quarter. Compared with June, their expectations for the turnover in the next quarter also deteriorated. In July, fewer firms answered that their employment in the last quarter has increased, while the expectations for the number of employees in the next quarter were more unafourable compared to last month. The deteriorating climate in manufacturing emerges from reduced current orders and estimates for reduced production for the next quarter.
The loss of consumer confidence came from more pessimistic estimates for the number of unemployed persons in Cyprus and from a lower chance of saving in the next 12 months.
In July, fewer consumers evaluated the current period as appropriate for large purchases while fewer intend to make such purchases in the next 12 months. Although fewer consumers than in June characterize the current period as unsuitable for savings, the number of those who answered that the potential savings over the next 12 months is remote, recorded an increase.
The climate in retail trade recorded a marginal improvement while in constructions it remained unchanged at the negative level of June.