In June, Cyprus experienced a notable decrease in economic uncertainty, reaching its lowest level in three years. According to a press release from the Economics Research Centre of the University of Cyprus, the economic sentiment in the country showed significant improvement during June 2023, as indicated by a 4.3-point increase in the Economic Sentiment Indicator (ESI-CypERC) compared to the previous month.

This improvement was primarily driven by enhanced confidence in the services sector and among consumers. The Services Confidence Indicator exhibited a strong surge, propelled by positive assessments of past performance, including demand and business situations. Additionally, there were modest but positive revisions in demand expectations.

The Retail Trade Confidence Indicator demonstrated a slight increase, primarily attributed to more favorable evaluations of current stock levels and upward adjustments in sales expectations. Despite a slight decline in firms' assessments of recent sales, the overall sentiment remained positive within the retail trade sector.

However, the Construction Confidence Indicator experienced a minor decline, resulting from a deterioration in both of its components. Specifically, firms' assessments of the level of order books worsened in June, and employment expectations also decreased.

Conversely, the Industry Confidence Indicator showed a marginal increase, driven by improved perspectives on the stocks of finished products and more optimistic production expectations. However, firms' assessments of order book levels experienced a decline.

The rise in the Consumer Confidence Indicator was attributed to improvements across all its components. Consumers expressed more positive evaluations of their recent and future financial situations and revised their expectations regarding the economic conditions in Cyprus in an upward direction. Furthermore, there was a marked increase in consumers' intentions to make significant purchases in the coming months.