Economic sentiment at 17-month low

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Economic sentiment deteriorated in August to a 17-month low, as the University of Cyprus index decreased by 4.5 points from July amid a cost of living crunch.

The decrease in the ESI-CypERC index to 96.7 was due to weaker business confidence in services and, to a lesser degree, lower economic confidence in construction and consumers.

According to the Economic Research Centre of the University of Cyprus, the Services Confidence Indicator decreased as firms assessed their past performance less favourably and revised their turnover expectations downward.

The Retail Trade Confidence Indicator remained unchanged.

On the one hand, firms’ assessments of current stock levels improved, while their views on past and future sales worsened.

Downward revisions in employment expectations mainly drove a dip in the Construction Confidence Indicator.

The Industry Confidence Indicator stayed at the level registered in July, as all the components of the Indicator remained broadly stable.

The Consumer Confidence Indicator decreased marginally, mainly driven by consumers’ weaker intentions of making major purchases over the next months.

In August, economic uncertainty in Cyprus declined due to improved confidence in services, construction, and consumers.

Uncertainty among firms in the retail trade increased, while it remained broadly unchanged in industry.