COVID19: Cyprus economic sentiment records biggest drop

COVID-19 impacted Cyprus economic sentiment saw the biggest drop recorded in April after it fell 21.9 points compared to the previous month when the economy was virtually shut down.

In April, economic sentiment deteriorated further as the Economic Sentiment Indicator (ESI-CypERC) of the University of Cyprus decreased by 21.9 points compared with March 2020, suffering a historically large drop.

According to an Economic Research Centre report,  April sentiment declined below its long-run average, suggesting a grim outlook for economic activity in Cyprus, as a result of the coronavirus pandemic.

It said the decrease was driven by worsening confidence in services, retail trade and industry, as well as weakening consumer confidence.

A decrease in the Services Confidence Indicator resulted from firms’ less favourable views on their past business situation and past demand, as well as from major downward revisions in demand expectations.

The decline in the Retail Trade Confidence Indicator was due to more negative company assessments of their past sales and more pessimistic sales expectations.

The Construction Confidence Indicator remained unchanged at the negative level registered in March, as more optimistic employment expectations were offset by worsening assessments of the level of order books.

The Industry Confidence Indicator dropped as a result of a deterioration in firms’ assessments of their current levels of orders and stocks of finished products, as well as downward revisions in production expectations.

The decrease in Consumer confidence was driven by downward revisions in their expectations about their financial situation and the economic conditions in Cyprus, as well as by weaker intentions to make major purchases.