Business climate gradually improving

The business climate in Cyprus seems to be improving, with the monthly Business and Consumer Survey conducted by the University of Cyprus Economics Research Centre showing a 2.3 point improvement in May to 100.7, from the previous month. The Economic Sentiment Index has seen a steady increase since its worst reading of 77.7 points in May 2013 when the island’s economic crashed following the Eurogroup of Eurozone finance ministers’ meeting decision to impose a bailin on unsecured deposits to rescue the Bank of Cyprus and a 10 bln euro bailout for the bankrupt state with a runaway deficit.

“The improvement is due to an improvement in the services sector and consumer sentiment, as well as marginal increase in the manufacturing sector,” the UCy survey said.

“This is based on the positive rating of the economy and optimistic prospects for demand in the next quarter, while the sentiment among consumers improved due to a lesser pessimistic projections for the economic state of households in the past and in the next year.” The climate in the retail sector worsened due to negative projections of the current state of the economy and the anticipated conditions in the next quarter, while the construction sector also remains in negative territory, the survey said. It added that the business climate in the services sector seems to be improving faster than the other sectors based on the economic activities that will help spur a recovery, it concluded.