Economic sentiment further improves in Cyprus following easing of restrictions

The easing of travel restrictions, imposed due to the outbreak of the coronavirus pandemic, has led to an improvement of the Economic Sentiment Indicator (ESI) in Cyprus, according to the latest report from the Economics Research Center at the University of Cyprus.

The report stated that the ESI increased by 4.5 points in July, compared with June, as confidence improved in the services sector and among consumers, replacing previous uncertainty.

The ESI rose by 2.3 points in June following the first easing of restrictions, after taking a beating in March when it dropped by 12.5 points, and by 21.9 points in April, as the coronavirus pandemic led to an almost total lockdown of the economy.

The partial lifting of travel restrictions has led to expectations of an early recovery of the tourism and travel sector, but the results have been disappointing so far, as travel from large tourist markets is still regulated by restrictions.

Nevertheless, the center said the Services Confidence Indicator was the result of companies’ less adverse assessments of their recent turnover and upward revisions in demand expectations.

It added that the consumers’ contribution to the rise of ESI resulted from upward revisions in consumers’ expectations about their future financial conditions and the future economic conditions in Cyprus.

The indicators in other important sectors of the economy, such as construction and industry, either decreased or remained unchanged, the center said.

The Economic Sentiment Indicator prepared by the center is part of the Joint Harmonised European Union Program of Business and Consumer Surveys, and is partly funded by the European Union and the Ministry of Finance.