In February 2024, Cyprus' economic climate deteriorated, with the Economic Sentiment Indicator (ESI) decreasing by 2.1 points compared to January 2024.

According to the University of Cyprus' Economics Research Centre, the decline in the ESI was due to weakened consumer confidence and a worsening business climate across all sectors, except for the construction sector.

Furthermore, February's decrease in the ESI is mainly attributed to lower expectations for business activity and more pessimistic assessments of households' and the country's overall economic situation.

The services sector experienced a decline due to more unfavorable evaluations of business turnover in the last quarter and more restrained expectations for the next quarter's turnover.

The report notes that the deterioration in retail trade and manufacturing was the result of downward revisions in sales expectations and production, respectively.

In construction, the climate improved due to more favorable assessments of ongoing projects and more positive expectations for the number of employees in the sector over the next quarter.

Consumer confidence fell in February. Consumers' responses regarding their current and future economic situations were more negative in February, and they appeared more pessimistic about the future economic situation in Cyprus.

However, the University of Cyprus' Economics Research Centre reports that the Index of Economic Uncertainty declined in February for the second consecutive month, resulting from reduced uncertainty among businesses (mainly in construction) and consumers.