Economic sentiment deteriorates in September

In September 2024, economic sentiment in Cyprus deteriorated, as the Economic Sentiment Indicator (ESI-CypERC) decreased by 1.4 points compared to August 2024, according to the Economics Research Center of the University of Cyprus.

It says that the decrease in the ESI-CypERC, which reversed the gains registered in August, was driven by a deterioration in business confidence in the services and construction sectors.

The decline in the Services Confidence Indicator, it notes, resulted from less favourable assessments of the recent business situation (including turnover) and, to a smaller degree, from downward revisions in turnover expectations.

The increase in the Retail Trade Confidence Indicator was mainly driven by improved views on recent and future sales, the ERC adds.

It says that the Construction Confidence Indicator declined, as firms expressed more negative views on the current levels of their order books and revised their employment expectations downwards.

In addition, the Industry Confidence Indicator rose for the second consecutive month, driven by improvements in firms’ assessments of the current level of order books and upward revisions in production expectations.

Moreover, the Consumer Confidence Indicator increased marginally in September, as consumers’ views on their recent and future financial situation improved.

It stresses that the Economic Uncertainty Indicator for Cyprus decreased, as the impact of some factors that had contributed to the rise in uncertainty in August moderated in September (e.g. lower volatility in financial markets, partial progress regarding the Great Sea Interconnector project). Moreover, the deceleration of inflation and the downward trend in interest rates seem to make it easier for firms and households to predict their future financial situation, resulting in lower economic uncertainty.

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.

(Source: CNA)