The University of Cyprus' Economics Research Center observed an improvement in the economic climate in January 2024, attributing it primarily to a strengthened business environment in the services sector.

According to the Center, the Economic Sentiment Indicator (ESI) increased by 2.3 points compared to December 2023. The improvement in the services sector was driven by more positive assessments of business turnover for the last and next quarters, despite a further deterioration in responses regarding the recent economic situation of businesses. Conversely, the climate in the construction sector declined due to more negative evaluations of ongoing projects and more pessimistic estimates for employment in the sector over the next quarter. There were no significant changes in the business climate in retail trade and manufacturing compared to December.

Regarding consumer sentiment, the Center reports that it remained stable in January at December's levels. "On one hand, consumers' intentions to make major purchases strengthened in January. On the other hand, assessments of the recent economic situation of households and expectations for the country's future economic situation were more negative compared to December," the report notes.

The Center's announcement also mentions that the Economic Uncertainty Index decreased in January, yet remained relatively high. Specifically, uncertainty decreased in manufacturing, while in services, it remains relatively high despite the January reduction. Uncertainty increased among businesses in retail trade and construction, as well as among consumers.