Recovery of the CCLEI continues but remains significantly lower than pre-pandemic levels

The recovery of the Cyprus Composite Leading Economic Index (CCLEI) continued in July and August 2020 from the historically low levels of the crisis, as data published by the Economic Research Center of the University of Cyprus show.

According to a Hellenic Bank’s press release, the CCLEI recorded a decrease of 6.0% from year to year in July 2020 reaching a level of 100.6, after year-over-year reductions of 8.0% in June and 11.1% in May, based on the latest and revised data.

The recovery of the CCLEI is attributed to a series of variables, mainly domestic, which record an improvement in July and August 2020 compared to previous months. In particular, preliminary estimates indicate an improvement in the volume of retail sales and electricity production in July and August 2020, as well as for the total number of sales contracts in August.

The year-over-year growth rate of credit card transactions also has a positive effect on the Index, even though this rate is lower compared to previous months. Similarly, the Economic Sentiment Indicator (ESI) in the euro area, including Cyprus, continued to improve in August 2020, but remained below its long-term average, indicating a precarious economic environment.

On the other hand, the effects of the pandemic are still particularly noticeable in tourism in July and August 2020 as tourists arrivals were overwhelmingly lower than in the corresponding months of the previous year.

In summary, the recovery of the CCLEI for July as well as of the flash estimate of the Index for August 202 indicate the continuing gradual improvement of the economy. However, the economic environment of the Cypriot economy remains uncertain, due to the unpredictable development of the pandemic and its consequences.