The Cyprus Composite Leading Economic Index (CCLEI) recorded an annual increase of 3.9% in Apri 2021 reaching a level of 101.5, after the annual reductions of 2.5% in March and 8.8% in February (based on the latest and revised data).
According to a press release by the Hellenic Bank, which developed the index with the University of Cyprus, the strong increase of the CCLEI in April 2021 reflects the extensive vaccination campaigns against the COVID-19 pandemic, which helped improved economic growth expectations and conditions.
The CCLEI records the economic tendencies on a monthly basis and is prepared in cooperation with the University of Cyprus.
It says that both the Economic Sentiment Indicator (ESI) in the euro area, and the Economic Sentiment Indicator in Cyprus significantly strengthened in April 2021.The deterioration of the business climate in Cyprus recorded in March 2021 subsided and is strengthening significantly in April 2021.
It adds that despite the low levels, tourist arrivals, as well as a number of domestic variables, have a positive effect on the CCLEI and the growth of the domestic economy. In particular, preliminary data indicate a positive year-over-year growth rate in March and especially April 2021 for both the volume of electricity production and the volume of retail sales.
In addition, the significant year-over-year increase in the total number of property sales contracts continues in April 2021, as well as the recording of positive year-over-year growth rates of credit card transactions, it says.
On the other hand, it notes that the formation of oil prices (Brent Crude) at pre-pandemic levels contributes negatively to the year-over-year growth rate of the CCLEI. It adds that the rise of most components of the CCLEI reflects not only the extensive vaccination campaigns, but also the improvement of the economy from the strong effects suffered from the pandemic.
"The strong rise of the CCLEI in April 2021 suggests that the Cypriot economy is on the road to recovery following the strong effects suffered from the pandemic. However, the short-term growth prospects of the Cypriot economy still depend on the evolution of the COVID-19 pandemic, and in particular on the speed of vaccination campaigns" it notes.