In June 2024, the economic climate improved slightly, with the Economic Sentiment Indicator (ESI) increasing by 0.6 points compared to May 2024.

According to the Economics Research Center of the University of Cyprus, the rise in the ESI was due to strengthened consumer sentiment and, to a lesser extent, improved business sentiment in the services sector.

The Center notes that the limited improvement in the services sector resulted from more positive evaluations of the current business situation. However, business expectations for turnover in the next quarter were more pessimistic in June.

In the construction sector, sentiment weakened further due to more negative responses regarding ongoing projects and downward revisions in employment expectations. Business sentiment in retail trade and manufacturing did not show significant changes in June compared to May.

Additionally, consumer sentiment increased in June as consumers' intentions to make large purchases strengthened. Furthermore, consumer expectations for the future financial situation of their households and the country improved in June.

However, it is noted that households and businesses in the services sector faced greater difficulty in June than in May in predicting their future economic situation, equating to increased uncertainty.

As a result, the Economic Uncertainty Indicator rose, although it remains below the levels recorded in the first four months of 2024.