Cyprus’ economic index eases slightly

Rising oil prices and the mounting geopolitical pressures decelerated the Cyprus Composite Leading Economic Index (CCLEI) in February, according to the University of Cyprus’ Economic Research Center (ERC).

According to ERC, the CCLEI recorded a year-over-year increase of 15% in February 2022, reaching a level of 111.8 units, after annual increases of 15.2% in January 2022 and 14.4% in December 2021, based on recent and revised data.

Most of the domestic and international components of the CCLEI contributed to its positive growth rate in February 2022 compared to the previous year. According to ERC, confidence in all business sectors, especially in the services sector, which strengthened in February 2022 compared to last year, led to the strengthening of the Economic Sentiment Indicator (ESI) in the euro area and in Cyprus.

Moreover, the consumption and trade sector had a positive effect on the CCLEI and domestic economic activity, with the value of credit card transactions and the volume of retail sales still showing a significant year-over-year increase in February 2022, according to preliminary data.

Furthermore, according to preliminary data, the temperature-adjusted volume of electricity production, the total number of property sales contracts, as well as tourist arrivals continue to exert a positive effect on the CCLEI, recording an increase in February compared to last year.

In contrast, the significant increase in the Brent crude oil price last month puts the brakes on the further CCLEI growth.

“The decelerating growth rate of the February CCLEI reflects, in part, the ongoing pandemic challenges, rising energy costs and growing geopolitical tensions,” the ERC said, noting that “the war in Ukraine and the international sanctions are partially reflected in February’s economic data and consequently in the CCLEI.”

Meanwhile, Agriculture Minister Costas Kadis on Thursday urged farmers not to panic, as support measures for farmers at the EU level are expected soon.

Prior to a meeting at the offices of the Cyprus Agricultural Payments Organization (KOAP), the minister said he will attend the EU Agriculture Ministers Council on Monday to discuss ways of supporting the sector.

He said there was no need to panic, as, his ministry’s focus was on how to support farmers during this difficult period.