Cyprus Leading Economic Index continued rising in August, albeit at a slower pace

Cyprus’ Composite Leading Economic Index (CCLEI) continued its upward trend in August, albeit at a slower pace, mainly affected by the component of the Economic Sentiment Indicator (ESI) in the euro area, the Economics Research Centre (ERC) of the University of Cyprus has said.

According to the ERC, in August the CCLEI recorded a year-over-year increase of 2.2% in August 2023, following the year-over-year increases of 2.4% and 2.0% recorded in July and June 2023.

“Containment was observed in the upward trend of the CCLEI in August 2023. This restraint is due, in part, to the year-over-year growth rate of the temperature-adjusted volume of electricity production, which has exhibited a consistent decline since May 2023,” the EC said.

Furthermore, the upward trajectory is curbed by the Economic Sentiment Indicator (ESI) in the euro area, recording a negative year-over-year growth rate in August 2023, in contrast to the ESI in Cyprus, which exhibited a year-over-year increase.

“The ongoing deterioration witnessed in the ESI in the euro area is indicative of the prevailing high level of uncertainty in the European economic environment, which inevitably affects the growth prospects of the Cypriot economy,” the ERC added, pointing out however that the remaining sectors that constitute the CCLEI, including tourism and retail trade, contributed to sustaining a favourable year-over-year growth rate for the Index.

As the ERC noted despite the persistent uncertainty, the CCLEI maintains its upward trajectory in August 2023.

“The positive performance recorded by most of the domestic sectors comprising the CCLEI contributes to the sustained positive year-over-year growth rate of the Index. Its slowdown, however, reflects the extremely unstable economic and geopolitical environment that prevails, especially at the international level. Further information regarding the methodology of constructing the CCLE,” the ERC said.

(Source: CNA)