Economic sentiment declines in July

Economic sentiment declined in July, compared to June, as a result of weaker business confidence in almost all the main economic sectors driving growth, according to a report by the Economic Research Center of the University of Cyprus, emailed on Saturday.

The EU and the Ministry of Finance funded rolling report, which is part of economic surveys in all EU countries, said the monthly Economic Sentiment Indicator decreased by 1.7 points as a result of more pessimistic projections by the business partners in the economy last month compared to the previous month.

According to the report, the decline in the Services Confidence Indicator was driven by less favorable views by firms on their past performance (business situation and demand) and downward revisions in demand expectations.

It also said that businesses involved in the retail trade made more negative assessments of past sales and downward revisions in sales expectations.

Likewise, firms involved in the construction sector and industry also made more negative assessments than before based on the current level of order books, employment and production expectations.

Contrary to the business part of the economy, consumers were more optimistic about the future economic conditions in Cyprus. Expectations about more major purchases in the near future were factors which prevented a bigger decline of economic sentiment.

Consumers’ expectations were in line with improved data regarding unemployment, which fell in June to 6.6, almost two percentage points down from June, 2018, and also with optimistic projections of economic growth this year and next year.