The Cyprus Composite Leading Economic Index (CCLEI) recorded a decrease of 8.5% (from year to year) in June 2020 reaching a level of 99.6, after year-over-year reductions of 11.3% in May and 10.6% in April (based on the latest and revised data).
According to a press release issued by the Hellenic Bank, the negative year-over-year growth rate of the CCLEI in June 2020 reflects the uncertain environment caused by the pandemic and its effects.
Tourism which is one of the main drivers of the Cypriot economic activity, has been significantly affected by the restrictive measures taken by the Cypriot Government as well as other countries, with the tourists’ arrivals in June and July of 2020 being considerably lower compared to the corresponding months last year.
In contrast, the drop of the Index is restrained mainly by a number of domestic variables that record significant improvement in June and July compared to the previous months. In particular, although preliminary estimates indicate negative year-over-year growth rates for the volume of retail sales and electricity production in June and July 2020 as well as for the total number of sales contracts in July, these year-over-year reductions are much smaller than the year-over-year reductions recorded in previous months.
Moreover, the improvement of the Economic Sentiment Indicator (ESI) in the euro area, including Cyprus, combined with the fact that the value of visa card transactions continues to increase, reflects the gradual improvement of the economy as well as the transition to electronic methods of payment as a precautionary measure against the coronavirus pandemic.
In summary, the reversal of the downward trend of the CCLEI for June as well as of the flash estimate of the Index for July 202 indicate some improvement in economic activity.
It is also noted that, the outlook of economic activity in Cyprus is subject to extremely high uncertainty due to the unpredictable development of the pandemic and its consequences.
Further information regarding the methodology of constructing the CCLEI Index can be found at: http://www.ucy.ac.cy/erc/el/publications/cyprus-composite-leading-economic-index-cclei