The economic climate improved for the second consecutive month in May 2026, with the Economic Sentiment Indicator (ESI) rising by 4.2 points compared to April, according to the latest survey by the University of Cyprus’s Economics Research Centre (CypERC). According to the Center, the latest increase was driven by stronger business confidence – primarily in services and construction – as well as by improved consumer confidence.

As noted, the increase in the Services Confidence Indicator resulted from firms’ higher expectations regarding their turnover and, to a lesser extent, from improved assessments of their recent business situation, while the Retail Trade Confidence Indicator recorded a slight decline, reflecting a deterioration in firms’ views on recent sales, despite upward revisions to their sales expectations.

Similarly, it is noted that the increase in the Construction Confidence Indicator was due to improved assessments of current order book levels, while, the Industry Confidence Indicator rose marginally, as firms’ views on the current levels of order books and stocks of finished products improved.

It is added that the Consumer Confidence Indicator rose in May, reflecting improvements across all its components, as compared with March and April, consumers’ views on their recent and future financial situation were less negative, while their expectations regarding economic conditions in Cyprus became less pessimistic. Finally, consumers’ intentions to make major purchases increased in May.

The Economic Uncertainty Indicator for Cyprus decreased in May, owing to lower business uncertainty among firms in all sectors except retail trade, and to reduced consumer uncertainty across all income groups, the survey adds.

Source: CNA(ΚΥΠΕ)