The Economics Research Centre (CyERC) of the University of Cyprus has reported notable fluctuations in Cyprus' economic uncertainty from December 2023 to February 2024. 

In December, the Economic Policy Uncertainty (EPU) index stood at 223.04, rising sharply to 279.76 in January before falling back to 221.14 in February. The CyERC attributes January's peak to increased geopolitical unrest, particularly the crisis in the Middle East and the Red Sea, which sparked concerns over global trade disruptions and their economic repercussions. This trend mirrored a similar temporary spike in the European EPU index for January.

However, the Centre observed a return to near-December levels of economic uncertainty in Cyprus and Europe by February. This change suggests a relative easing of economic uncertainty, though it remains high by historical standards.

Introduced by Baker, Bloom, and Davis in 2016, the EPU index measures economic uncertainty concerning the effectiveness of economic policies. It employs textual analysis, specifically assessing the frequency of newspaper articles containing words related to economy, policy, and uncertainty. The EPU index now encompasses nearly 30 countries, including 11 in Europe.

The CyERC of the University of Cyprus has recently begun constructing the EPU index for Cyprus, providing insights into the impact of economic uncertainty on the country's economy. The Centre's findings reveal a historically lower and less volatile uncertainty in Cyprus until 2007. However, post-2008, the EPU index showed an upward trend, with significant peaks occurring in 2012 due to the banking crisis, in 2020 amid the Covid-19 pandemic, and in 2022 during the Russian invasion in Ukraine.