Cyprus economic growth moderates amid global uncertainty

The annual growth rate of Cyprus’ Composite Leading Economic Index (CLEI) remained positive in October 2023, despite a slight deceleration, according to the University of Cyprus Economic Research Centre.

Based on the centre’s report, Cyprus’ Composite Leading Economic Index (CLEI) marked a 1.5 per cent year-on-year increase in October 2023, following annual rises of 1.9 per cent and 2.1 per cent in September and August 2023, respectively, based on recently revised data.

The report noted that the recent military conflicts in Israel further exacerbated the already strained international geopolitical environment, negatively impacting the October CLEI.

Moreover, increased geopolitical tensions have reignited economic uncertainty, reflected in the Economic Climate Index (ECI) within the eurozone, showing a deterioration throughout 2023.

Additionally, the upward trajectory of the CLEI is moderated by the adjusted volume of electricity production, which continues to exhibit an annual decline since May 2023.

However, the growth of various domestic sectors, including tourism, retail trade, and real estate, along with stabilised oil prices, counterbalanced the aforementioned negative developments, resulting in a positive annual growth rate for the October CLEI.

“In summary, while sustaining positivity, the annual growth rate of the CLEI shows signs of slowdown in October 2023,” the centre said in the latest report.

“The decline in the annual growth rate of the CLEI to lower levels compared to previous months reflects the uncertain geopolitical and unstable economic environment, which inevitably adversely impacts the growth prospects of the Cypriot economy,” the report concluded.