The Center for Economic Research at the University of Cyprus reports an improvement in economic sentiment in August, mainly driven by entrepreneurs. Consumers, on the contrary, are dissatisfied with their financial condition.
Compared to July this year, the economic sentiment index increased by 1.5 points. Growth was mainly driven by an increase in the business confidence index in the service sector, construction and industry.
The improvement in business confidence in the service sector is due to companies being more optimistic about their expected turnover. In the construction sector, confidence rose for the second month in a row. And in the industrial sector, companies predict an increase in production volumes.
In August, entrepreneurs generally assessed the number of orders and the level of employment positively.
There has been a slight decline in entrepreneurial confidence in the retail sector: business owners believe that sales are declining.
The consumer confidence index, on the contrary, decreased. Consumers negatively assess their current and future financial situation, as well as the economic situation in the country as a whole.
Consumers are less inclined to make expensive purchases.
The economic uncertainty parameter has increased. Uncertainty is caused by the geopolitical situation in the Middle East, the volatility of international markets and the situation in the global economy, and the failure of a number of investment projects in Cyprus, mainly in the energy sector.
Below is a graph of the economic sentiment index over recent years. Source: Center for Economic Research, University of Cyprus
The text was prepared based on materials from Sigma
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