In the midst of the news COVID-19 pandemic the November flash estimated Cyprus Composite Leading Economic Index (CCLEI) marked a small reversal.
The Index recorded a year-over-year decrease of 4.1% in October 2020 reaching a level of 103.2, after the year-over-year reductions of 4.3% in September and 5.4% in August (based on the latest and revised data).
According to a press release, issued by Hellenic Bank, the continued recovery of the CCLEI from the historically low levels of the crisis appears to have come to a halt since in October of 2020 the year-over-year growth rate of the Index remains around at that of September while the flash estimate of the CCLEI in November 202 (year-over-year) growth rate records a decline from the previous month.
The year-over-year growth of the Index in October, as well as the fall of the year-over-year growth rate of the November flash estimated CCLEI, are attributed to the uncertainty of the second wave of the pandemic both in Cyprus and internationally, which in any case is lower compared to March of 2020.
More precisely, it is added in the press release, in October the Economic Sentiment Indicator (ESI) in the euro area, including Cyprus, remained at the same level as in September while in November it decreased.
In addition, despite its seasonality, tourism continues to be a brake on the recovery of the CCLEI, since for the months of October and especially November of 2020 tourist arrivals continued to be significantly reduced compared to the corresponding months of the previous year.
Moreover, the year-over-year improvement in electricity production seems to be slowing down, reflecting both the recent anti-pandemic measures and the extremely high temperatures recorded in recent months.
Nevertheless, a number of domestic variables have a positive effect on the CCLEI. In particular, preliminary estimates of the year-over-year growth rates indicate the year-over-year improvement in the volume of retail sales in October 2020 compared to the previous months, as well as a significant year-over-year improvement in the total number of sales contracts in October.
Furthermore, credit card transactions show a significant year-over-year improvement, reflecting, in part, the increasing shift to electronic means of payment.
The press release concludes that the year-over-year growth rate of the CCLEI in October and the fall of the year-over-year growth rate of the November flash estimated CCLEI reflect the uncertain economic environment due to the dynamic evolution of the pandemic locally and internationally.