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Cyprus economic outlook rises to around 2010 levels

Economic sentiment in Cyprus improved significantly in May, a publicly funded survey showed on Wednesday, reaching 2010 levels after hitting a trough due to its international bailout last year.

The economic sentiment indicator (ESI) rose 2.3 points in May to 100.7 points, topping its 100-point base level for the first time in four years, on the back of an improved outlook in the services sector.

That area was likely to drive future economic growth, researchers at the University of Cyprus said.

The ESI is collated from respondents in surveys ranging from consumer spending patterns to retail trade, manufacturing and construction. Readings below 100 mean negative sentiment and above that base level indicate optimism.

The outlook in the retail and construction sector remained subdued, the University’s economic research department said.

International lenders recently revised their outlook for the island’s economy, saying a recession this year would be shallower than expected because of more resilient consumer demand.

The EU and the IMF modified the island’s output projection to -4.2 per cent from a February forecast of -4.8 per cent.

The business indicator has been rising steadily since April 2013, a month after Cyprus needed a 10 billion euro bailout. (Reuters)

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