Economic sentiment in Cyprus experienced a significant improvement in June 2023, as the Economic Uncertainty Index (EUI) dropped to its lowest level in the past three years, according to a report released this week by the Centre for Economic Research at the University of Cyprus.

According to the report, uncertainty decreased among households and businesses across all sectors, excluding that of retail trade.

Moreover, in June, the Economic Sentiment Indicator (ESI) increased by 4.3 points compared to the previous month, indicating a strengthening of the business climate in the services sector and a boost in consumer confidence.

However, the business climate in other sectors remained relatively stable compared to May.

Notably, the services sector experienced a significant improvement in business assessments regarding their economic situation and turnover.

Businesses in this sector expressed more positive evaluations of their current status and expectations for the next quarter.

In the retail trade and manufacturing sector, there was a slight improvement in the business climate.

Retail businesses revised their sales expectations upward, while manufacturing companies positively adjusted their production forecasts.

On the other hand, the construction sector experienced a slight decline in the business climate, as companies reported more negative evaluations of ongoing projects and reduced their employment projections.

What is more, consumer confidence witnessed an increase in June, with all its components showing improvement.

Consumers evaluated their recent economic situation more favourably and appeared less pessimistic about the future economic conditions for both their households and the country as a whole.

In addition, consumers displayed less restraint towards making significant purchases in the coming months.