For the second consecutive month, economic sentiment in Cyprus decreased in March, with the Economic Sentiment Indicator (ESI) moving downward due to a deterioration in the business climate across all sectors.
Specifically, according to the Centre for Economic Research (CER), the ESI in March decreased by 1.2 units compared to February 2024, falling to 102.1 units.
“The decline in the ESI stemmed from the worsening of the business climate across all sectors, mainly due to lower expectations for the activity of the next quarter,” stated the CER, noting that, conversely, consumer confidence showed a slight improvement, although consumers’ intentions to make significant purchases in the coming months weakened in March.
Despite the improvement in assessments of the current economic situation of businesses, the sentiment in services declined due to downward revisions in expectations for the turnover of the next quarter.
In retail trade and construction, assessments of the current business situation did not show significant changes from February levels; however, estimates for retail sales and the number of employees in construction were more pessimistic in March, resulting in a weakening of sentiment in both sectors.
In manufacturing, sentiment declined due to more adverse assessments of inventory levels of finished products and negative forecasts for production in the next quarter.
According to the CER, consumers partially revised the pessimistic responses they had given in February, leading to an increase in consumer confidence in March.
Specifically, consumers assessed less negatively their recent and future economic situation and revised upwards their expectations for the future economic situation in Cyprus. Nevertheless, consumer expectations remain below those recorded in March 2023.
Furthermore, the Economic Uncertainty Index decreased to 29.5 units in March, although it remains higher than the corresponding level from last year.
