Economic climate in Cyprus moved upward in December with businesses and consumers feeling upbeat due to the vaccine against the covid-19 virus, the University of Cyprus’ Economic Research Centre has said.
The Economic Sentiment Indicator (ESI) compiled by the University of Cyprus’ Economic Research Centre (ERC) rose by 2.8 points to 81,3 units in December from 78.5 in the previous month.
“The rise in December’s ESI came as a result of mainly the upward revisions in the economic expectations of consumers and businesses in the sectors of services, retail trade and constructions possibly due to the arrival of the vaccine against Covid,” the ERC said in a press release.
Amidst, the Covid-19 pandemic the ESI recorded its highest ever monthly drop by 22 points in April as Cyprus was in full lock down as part of measures to curtail the spread of the virus. The ESI began recovering in ensuing months remaining however significantly below the long-term average of 100 points.
The increase in the ESI was driven by confidence gains in all sectors, except manufacturing, as well as by improvements in consumer confidence, the ERC added.
Confidence in the services sector improved as a result of less adverse assessments in businesses’ recent turnover and upward revisions in demand expectations
According to the ERC, the Retail Trade Confidence Indicator increased mainly due to more favourable assessments of stock volumes and upward revisions in sales expectations.
The increase in the Construction Confidence Indicator was driven by improved assessments of the levels of order books and upward revisions in employment expectations.
In Manufacturing, the Confidence Indicator decreased marginally due to downward revisions in production expectations, despite more favourable assessments of the current levels of finished goods stocks.
The Consumer Confidence Indicator registered a small increase, as consumers revised their expectations about their future financial conditions and the future economic conditions in Cyprus upwards.
According to ERC, in December, consumers’ intentions to make major purchases weakened further, falling to their lowest point since April.