Cyprus Economic Indicator Growth Moderates in October 2023 Amid Geopolitical Strain

Cyprus' economic outlook, as measured by the Composite Leading Economic Index (CLEI), displayed resilience in October 2023 with a 1.5% year-on-year increase, according to the University of Cyprus Economic Research Centre. While this marks a slight deceleration compared to the 1.9% and 2.1% growth in September and August 2023, respectively, the positive growth rate persisted despite challenges. The recent military conflicts in Israel heightened international geopolitical tensions, negatively impacting the October CLEI.

The Economic Climate Index (ECI) within the eurozone, reflecting economic sentiment, experienced a deterioration throughout 2023 due to increased geopolitical tensions. The report notes that these global uncertainties, compounded by the strained economic environment, have affected the growth prospects of the Cypriot economy.

Despite the challenges, several domestic sectors contributed to sustaining the positive growth trajectory of the CLEI. Growth in tourism, retail trade, and real estate, along with stabilized oil prices, served as counterbalances to the negative external factors. However, the annual decline in the adjusted volume of electricity production since May 2023 has moderated the overall growth of the CLEI.

"In summary, while sustaining positivity, the annual growth rate of the CLEI shows signs of slowdown in October 2023," stated the Economic Research Centre. The report concludes that the decline in the annual growth rate is reflective of the uncertain geopolitical and economically unstable environment, impacting the growth outlook for Cyprus. The country remains watchful of these challenges and their potential repercussions on its economic resilience.

By fLEXI tEAM