In April 2020, economic sentiment in Cyprus deteriorated further as the Economic Sentiment Indicator (ESI-CypERC) of the University of Cyprus decreased by 21.9 points compared with March 2020, suffering a historically large drop.
According to an Economic Research Centre report, in April ESI-CypERC declined below its long-run average, suggesting a grim outlook for economic activity in Cyprus, as a result of the coronavirus pandemic. The decrease in ESI-CypERC was driven by worsening confidence in services, retail trade and industry, as well as weakening consumer confidence.
The decrease in the Services Confidence Indicator resulted from firms’ less favourable views on their past business situation and past demand, as well as from major downward revisions in demand expectations.
The decline in the Retail Trade Confidence Indicator was due to firms’ more negative assessments of their past sales and more pessimistic sales expectations.
The Construction Confidence Indicator remained unchanged at the negative level registered in March, as more optimistic employment expectations were offset by worsening assessments of the level of order books.
The Industry Confidence Indicator dropped as a result of a deterioration in firms’ assessments of the current levels of their order books and stocks of finished products, as well as downward revisions in production expectations.
The decrease in Consumer Confidence Indicator was driven by downward revisions in consumers’ expectations about their financial conditions and the economic conditions in Cyprus, as well as by consumers’ weaker intentions to make major purchases.