Economic sentiment improves further

Cyprus’ economic sentiment in June increased 6.2 points from May, reflecting the improvement in high consumer confidence and activity in services.

The Economic Sentiment Indicator (ESI), compiled by the University of Cyprus’ Economic Research Centre, rose by 6.2 units in June from the previous month, reaching 110.3 units.

A year ago, the ESI registered only 78.5 points following a harsh national lockdown.

In May, the ESI returned above the long-term average of 100 units since March 2020, the start of the COVID-19 pandemic.

Indicators have been moving upward since March 2021, reflecting the favourable conditions for economic activity in the coming quarters.

According to economists, the Services Confidence Indicator increased strongly for the fourth consecutive month in June due to improved assessments of past performance (business situation and demand) and significant upward revisions in demand expectations.

A small rise in the Retail Trade Confidence Indicator was due to more favourable views on the current stock levels and upward sales expectations.

Furthermore, a decline in the Construction Confidence Indicator was driven by negative assessments in employment expectations.

`Upward revisions in production expectations drove the marginal rise in the industry confidence indicator.

However, consumer confidence reached its highest level since the pandemic. Assessments of current and future household financial conditions and expectations about the economy improved. Nevertheless, intentions to make major purchases remained roughly unchanged in June.