In December 2024, economic sentiment in Cyprus showed improvement as the Economic Sentiment Indicator (ESI-CypERC) of the Economics Research Centre of the University of Cyprus rose by 1 point compared to November 2024. The uptick in the ESI-CypERC was attributed to stronger consumer confidence and, to a lesser extent, increased business confidence in the industrial sector.

The Services Confidence Indicator remained unchanged. Lower demand expectations were balanced by improved assessments of the past business situation.

The Retail Trade Confidence Indicator also remained stable, as a decline in views on recent sales and stock levels was offset by improved sales expectations. Meanwhile, the Construction Confidence Indicator experienced a slight decline for the second consecutive month, driven by downward revisions in employment expectations.

According to the Economics Research Centre, the improvement in the Industry Confidence Indicator was primarily due to better assessments of firms’ current order books and upward revisions in production expectations.

Moreover, the Consumer Confidence Indicator rose for the second consecutive month in December. The significant increase in consumer confidence stemmed from more optimistic views on consumers’ recent and future financial situations and upward revisions in expectations for Cyprus's economic conditions.

Finally, the Economic Uncertainty Indicator for Cyprus increased in December, reflecting higher uncertainty among firms in services and retail trade. However, uncertainty within the services sector remained relatively low. Notably, uncertainty among construction firms and consumers declined significantly during the same period.