In September 2023, the economic sentiment in Cyprus deteriorated, according to the Economic Sentiment Indicator, released by the Economic Research Center of the University of Cyprus. The ESI witnessed a decline of 1.6 points compared to its August figures.

However, it's noteworthy that despite the fluctuations, the ESI has remained above its long-term average of 100 points for the nine months of the year. This signifies a resilient domestic economic activity but one that is accompanied by uncertainties and challenges.

This drop in the ESI is attributed to the further weakening of consumer confidence and a decline in the business sentiment across all sectors, except for the construction sector.

According to the Research Center, businesses in the services sector have assessed their recent economic situation as less favorable, resulting in a slight decline in sentiment in this sector.

The deterioration in the retail sector emerged from negative evaluations of the current state of businesses, such as recent sales and current inventories.

In the manufacturing sector, there was a slight downturn, mainly due to downward revisions of production estimates for the upcoming quarter.

Conversely, the sentiment in the construction sector marginally improved, thanks to more optimistic employment projections for the next quarter.

The consumer climate in September has reportedly dipped to its lowest point of the year. Compared to August, consumers have grown more pessimistic about both their recent and future economic situations. Specifically, their evaluations of the recent economic situation in Cyprus significantly worsened, while their future economic expectations for the country remained as negative as they were in August.

Moreover, the Economic Uncertainty Index recorded an increase in September, driven by heightened uncertainties among both consumers and businesses, especially in the service and construction sectors.

The recording of the economic climate in Cyprus is conducted with the collaboration of the Economic Research Center of the University of Cyprus and RAI Consultants Ltd, as part of the Joint Harmonised European Union Programme of Business and Consumer Surveys. This project is funded by the European Union, the Ministry of Finance, and the University of Cyprus.