Economic sentiment improves

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Εconomic sentiment in Cyprus improved further in January on the back of retail confidence, as the Economic Sentiment Indicator (ESI-CypERC) increased by 0.9 points from December.

According to the Economics Research Centre of the University of Cyprus, the increase was driven by confidence gains in retail trade, industry and among consumers.

The index reached 105.6 in January from 104.7 in December and 108.1 a year ago.

The Services Confidence Indicator remained unchanged, as the improved views on past performance (demand and business situation) were offset by downward revisions in demand expectations.

It is noted that the increase in the Retail Trade Confidence Indicator was driven by improvements in all of its components, i.e. assessments of past sales, views on current stock levels and sales expectations.

On the other hand, the decrease in the Construction Confidence Indicator resulted from the deterioration in firms’ assessments of order book levels, despite upward revisions in employment expectations.

The Industry Confidence Indicator rose because of improved views on the current level of order books and upward revisions in production expectations.

The increase in the Consumer Confidence Indicator resulted from improvements in all of its components.

In January, consumers assessed their current and future financial conditions more favourably and revised their expectations about the economic conditions in Cyprus upwards.

Moreover, consumers’ intentions to make major purchases picked up in January.

In January, economic uncertainty in Cyprus remained broadly stable at the level registered in December, as the lower levels of uncertainty in retail trade and, to a smaller degree, in services and industry were offset by higher uncertainty in construction and among consumers.