Cyprus economic index grows in March, boosting forecasts for 2023

Cyprus’ Composite Leading Economic Index (CPI) saw an annual increase of 1.4 per cent in March 2023, according to the Economics Research Centre (CypERC) of the University of Cyprus.

This positive growth rate “reflects the positive performance of most of its domestic and international components, compared to March 2022,” as stated in an announcement released this week.

This latest development comes after annual decreases of 0.5 per cent and 2.9 per cent were recorded in February and January, respectively.

“The positive annual growth rate of the leading index in March 2023 reinforces the economic forecasts for 2023 according to which the Cypriot economy will not enter a recession and will record a growth rate significantly higher than the average growth rate of the eurozone, despite the remaining international economic and geopolitical uncertainty,” the centre said.

The variables chosen to calculate the index include the price of Brent Crude oil, the Economic Climate Index (ECI) in Cyprus and the Eurozone, total real estate sales, tourist arrivals, the value of credit card transactions, the retail sales volume index, and the electricity generation volume index.

Moreover, the centre explained that the international Brent Crude oil price contributed to the rise of the leading index, whose annual growth rate for the third consecutive month was negative.

In addition, tourist arrivals also played a significant role, with passenger arrivals in March 2023 approaching those recorded in March 2019. The report noted that the remaining domestic components of the index further bolstered the rise of the index.

Conversely, the centre noted that Economic Climate Index (ECI) in the eurozone worsened, reflecting the remaining international economic and geopolitical uncertainty and restraining the upside course of the index, despite the fact that the ECI in Cyprus strengthened in March 2023 when compared to March 2022.