Economic sentiment in Cyprus improved in December

In December 2022, economic sentiment in Cyprus strengthened, as the Economic Sentiment Indicator (ESI-CypERC) increased by 3.3 points compared with November 2022, according to a press release by the Center for Economic Research of the University of Cyprus.

The increase in the ESI-CypERC was driven by confidence gains in all sectors and among consumers, it said. The largest improvement in the business climate was registered in services. The Services Confidence Indicator rose, as a result of firms’ more favourable views on their past business situation and upward revisions in demand expectations.

It noted that the increase in the Retail Trade Confidence Indicator was due to improved assessments of past sales and upward revisions in sales expectations.

In addition, it said that the Construction Confidence Indicator increased for the second month in a row, as firms’ assessments reflected further improvements in the current levels of order books.

Τhe small increase in the Industry Confidence Indicator resulted from more favourable assessments of the current level of order books and upward revisions in production expectations, it added. The small improvement in the Consumer Confidence Indicator was mainly driven by upward revisions in consumers’ expectations about the future financial conditions of their households, according to the press release.

Nevertheless, consumers’ assessments about their recent financial conditions and expectations about the future economic conditions in Cyprus stayed broadly stable. Consumers’ intentions to make major purchases over the next months weakened marginally.

According to the Center for Economic Research of the University of Cyprus In December, the increase in economic uncertainty in Cyprus was due to higher levels of uncertainty recorded among firms in the services sector. Uncertainty among firms in the remaining sectors and among consumers declined in December.

It is clarified that the Economics Research Centre of the University of Cyprus (CypERC) and RAI Consultants Ltd participate in the Joint Harmonised European Union Programme of Business and Consumer Surveys. CypERC acknowledges funding from the European Union, the Ministry of Finance and the University of Cyprus for conducting the project “Business and Consumer Surveys” in Cyprus.