Economic sentiment rebounds in Cyprus after lockdown

Economic sentiment in Cyprus improved in June as the economy started picking up following a substantial easing of coronavirus restrictions, allowing more businesses to reopen, according to a report partly funded by the European Union and released on Friday.

The report said the economic sentiment indicator (ESI-CypERC) increased by 2.3 points compared with May, after tumbling continuously since the coronavirus pandemic started peaking in early March.

The report was prepared by the Economics Research Center of the University of Cyprus (CypERC), which participates in the Joint Harmonized EU Program of Business and Consumer Surveys, and is partly EU-funded.

“The increase in ESI-CypERC was driven by confidence gains in all sectors except construction, as well as by improvements in consumer confidence,” the report said.

It added that the Services Confidence Indicator rose marginally as the upward revisions in demand expectations were almost offset by the deterioration in firms’ assessments about their recent performance.

The marginal rise reflected uncertainty as to how tourism will move after the reopening of airports as of early June and the announcement of measures to revive tourism, which along with the travel sector contributes 21% to the country’s gross domestic product.

Reliable indications as to the extent tourism will recover are not expected before mid-July, according to hoteliers’ associations and the deputy minister of tourism. [Xinhua]