Cyprus’ Economic Rebound Hasn’t Convinced Businesses

FILE - A couple walk near the sea with their child on a baby stroller during a sunset in the southern costal resort of Ayia Napa in the eastern Mediterranean island of Cyprus, Sunday, May 19, 2019. (AP Photo / Petros Karadjias)

Some 5 ½ years after needing a 10-billion euro ($11.13 billion) international bailout to keep the economy and banks from going under, Cyprus – driven by record tourism – has come back but business confidence is waning.
Economic sentiment declined in Cyprus in July, compared to June, mostly because businesses aren’t enthusiastic about growth, said a report from the Economic Research Center of the University of Cyprus, according to the Chinese news agency Xinhua.

The European Union and Ministry of Finance funded economic surveys in all 28 member countries and in Cyprus it showed that the monthly Economic Sentiment Indicator fell 1.7 points because of business pessimism.

The decline in the Services Confidence Indicator was driven by less favorable views by firms on their past performance (business situation and demand) and downward revisions in demand expectations and that retail businesses were more negative over downward sales revisions.

It was the same for the construction sector and industry, based on the current level of order books, employment and production expectations, the news agency said.

Curiously though, consumers felt better about future economic conditions than did businesses but it didn’t show in sales, although the report indicated more people were considering more major expenditures, which could bring a boost.

Consumers’ expectations matched improved data about job prospects, fell in June to 6.6, almost 2 percent from the same month a year earlier, also with optimistic projections of economic growth this year and next year.