The economic climate in Cyprus deteriorated in April 2025, with the Economic Sentiment Indicator (ESI) falling by 2.5 points compared to March, according to data from the Economics Research Centre of the University of Cyprus (CypERC).

The decline is mainly attributed to a downturn in the business climate within the services sector, despite a positive shift recorded in construction. The worsening conditions in services reflect more negative assessments by businesses regarding their recent economic situation and turnover over the past quarter.

Conversely, the construction sector showed improvement, driven by a noticeable upward revision in employment expectations for the next quarter. In the manufacturing sector, a slight improvement was observed, mainly due to better assessments of final product inventories. Retail trade, however, experienced a slight decline, attributed to lower future turnover expectations.

Consumer sentiment remained stable compared to the previous month, with no significant changes across its components. However, despite the nominal stability, consumer uncertainty about the future financial situation of households increased significantly.

In addition, uncertainty among businesses in the construction and manufacturing sectors also rose, despite the improvement in sector-specific indicators, suggesting fragile optimism. As a result, the Economic Uncertainty Index for Cyprus recorded an increase, although it remains at relatively low levels amid a worsening international economic environment and ongoing trade tensions.