Cyprus economy remained resilient in April 2023, reinforcing forecasts

The Cyprus Composite Leading Economic Index (CCLEI) maintained a positive growth rate in April 2023, bolstering economic forecasts, according to a report released on Wednesday by the Centre of Economic Research at the University of Cyprus.

Although the rate of growth is expected to slow down, the report explained, the Cypriot economy is projected to avoid a recession.

In its reports, the Centre of Economic Research revealed that Cyprus’ CLEI recorded a 1.6 per cent annual increase in April 2023.

This follows a 0.6 per cent annual growth in March 2023 and a 0.6 per cent annual decline in February 2023, according to the most recently revised data.

The positive annual growth rate in April reflects the favourable performance of most domestic and international components of the CLEI compared to April 2022.

Notably, the international price of Brent Crude oil contributed to the CLEI’s rise, despite its continued negative annual growth rate.

Furthermore, the centre highlighted that tourist arrivals in April surpassed not only the corresponding figures from the previous year but also those of 2019 before the pandemic, a bumper year for Cypriot tourism.

In addition, the acceleration in the annual growth rate of other domestic components of the index further supported its upward trend.

While Cyprus’ Economic Climate Index (ECI) recorded positive annual growth rates in March and April 2023, the same index for the eurozone continued to display negative annual growth rates.

This discrepancy reflects international economic and geopolitical uncertainties, which have influenced the index’s trajectory.

What is more, the CLEI for April 2023 was estimated based on the availability of data such as the price of Brent Crude oil, the ECI in the eurozone and Cyprus, total property sales documents, tourist arrivals, credit card transaction values, and high-frequency data on electricity production volume adjusted for temperature.

Meanwhile, the retail sales volume was estimated based on the latest available information from a range of economic indicators.

The positive growth rate observed in April contributes to the overall positive outlook for the Cypriot economy in 2023, instilling confidence in its resilience and potential for further development.