Economic sentiment in Cyprus deteriorated sharply in October, with the Economic Sentiment Indicator (ESI) dropping by 2.9 points compared with September, according to a report by the Economic Research Center of the University of Cyprus on Saturday.
The ESI drop was in line with the drop of economic indicators across the European Union (EU).
The report said the decrease, which came in the wake of the collapse of the Thomas Cook Group that left an estimated loss of 40 million euros (about 44.8 million U.S. dollars) for hotels and led to a reduction in tourist arrivals, resulted mainly from a weakening of business confidence among firms in services and a deterioration of economic confidence among consumers.
The decline in the Services Confidence Indicator was driven by firms’ less favorable views on their past performance (business situation and demand) and downward revisions in demand expectations, the report said.
A marginal decrease in the Retail Trade Confidence Indicator resulted from downward revisions in sales expectations, it added.
The construction sector remained unchanged, as the improved assessments of the level of order books were offset by downward revisions in employment expectations, it said.
In contrast, there was an increase in the Industry Confidence Indicator as a result of upward revisions in production expectations, according to the report.
A downward revision in consumers’ expectations regarding their financial and economic conditions in the country, possibly influenced by adverse developments in tourism, as well as by weaker intentions to make major purchases, resulted in a deterioration in the Consumer Confidence Indicator.