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Economic sentiment improves, consumers gloomy

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Economic sentiment rose by 2.5 points in October, despite fragile consumer confidence as prices continue to rise, a monthly survey by the University of Cyprus has shown.

The Economic Sentiment Indicator (ESI-CypERC) for October increased by 2.5 points to 109.6 compared with 107.1 in September and the year-high of 110.3 recorded in June.

The pre-Covid economic sentiment in January 2020 recorded 111.7 from 108.4 in December 2019, due mainly to stronger business confidence in services and, to a lesser extent, from confidence improvements in industry, retail trade, and consumers.

Sentiment had improved from a year ago when it was 81.9.

For the October 2021 monthly indicator, the UCy survey said improvement in all sectors fired the index upward despite consumers remaining pessimistic about the future.

Consumers revised their expectations about the future economic conditions in Cyprus downwards; also, consumer intentions for making major purchases weakened.

An increase in the Services Confidence Indicator resulted from improved assessments of past performance (business situation and demand) and upward revisions in demand expectations.

The Retail Trade Confidence Indicator increased because of improved assessments of past sales and more favourable views on current stock levels. Sales expectations remained stable.

The Construction Confidence Indicator improved slightly due to more favourable assessments of the current levels of order books and upward revisions in employment expectations.

The marginal increase in the Industry Confidence Indicator was mainly driven by improved views on the current levels of order books.