CCLEI economic indicator about to flatline

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A leading indicator used to predict the direction of economic movements in Cyprus in future months continues its downward trend and is about to flatline at 0% growth.

The Cyprus Composite Leading Economic Index (CCLEI), estimated by the Economics Research Centre (CypERC) of the University of Cyprus, saw a year-over-year increase of 0.1% in February, following the year-over-year increases of 0.7% and 1.6% in January 2024 and December 2023, respectively.

The monthly study said that prevailing developments and uncertainties are inevitably restraining the CCLEI growth and therefore the growth prospects of the Cypriot economy.

“Several major European economies appear to be at risk of entering recessionary phases, while persistent military conflicts in the Middle East continue alongside the ongoing Russia-Ukraine war, with no signs of resolution,” the authors of the CCLEI said.

Economic sentiment negative

“As a result, the negative year-over-year growth rate of the Economic Sentiment Indicator (ESI) in the euro area continues in February 2024. In addition, the year-over-year growth rate of the ESI in Cyprus is also negative for the first time since February 2023.”

Nevertheless, the year-over-year CCLEI growth rate in February 2024 remains positive, albeit marginally, due to the slight decline in the year-over-year growth rate of the international Brent Crude oil price and the growth of various domestic components of the CCLEI, including property sales contracts, tourist arrivals, credit card transactions, electricity production, as well as a slight increase in retail sales volume.

Economic Research Centre (ERC) – Department of Economics, University of Cyprus (UCY)

In summary, the year-over-year CCLEI growth rate continues to slow. The international economic and geopolitical uncertainties inevitably affect the growth of the CCLEI.

For the January CCLEI, the UCy Economics Research Centre had said that the slowdown was impacted by international geopolitical tensions – the unfolding military conflicts in the Middle East, the ongoing Russian-Ukrainian war, and the slowdown in economic activity, mainly in the Eurozone.