Cyprus’ economic sentiment improved significantly in December 2025, as reported by the University of Cyprus’ Economics Research Centre (CypERC). This positive shift was largely attributed to enhanced business confidence in the services and retail sectors, alongside a notable rise in consumer optimism, which collectively elevated the Economic Sentiment Index.
Economic sentiment: Positive Trends in Business Sentiment
The Economic Sentiment Index recorded an increase of 1.6 points in December compared to November, reflecting a broader sense of optimism across various economic sectors. Notably, sentiment within the construction and manufacturing industries remained stable, maintaining the positive levels seen in the previous month.
Consumer Confidence on the Rise
Consumer confidence showed a marked improvement, driven by greater intentions among consumers to make significant purchases. This uplift was complemented by enhanced personal financial assessments and a growing belief in the country’s future economic prospects.
Uncertainty Declines
The Economic Uncertainty Index experienced a decline for the third consecutive month in December, primarily due to reduced uncertainty among consumers and businesses alike, particularly in the services and manufacturing sectors. CypERC highlighted that businesses reported a stronger financial situation and turnover over the past quarter, contributing to this downward trend in uncertainty.
Retail Trade Boosts Economic Outlook
The retail sector’s sentiment improved significantly, with businesses displaying more optimistic expectations regarding sales for the upcoming quarter. This positive outlook is expected to support ongoing economic activity as consumer spending starts to gain momentum.
Future Prospects Brighten
With relatively high levels of economic confidence and decreasing uncertainties among both consumers and businesses, the conditions appear favourable for economic growth in Cyprus in the near future. The CypERC survey concluded that these elements are likely to foster a more dynamic economic environment in the coming months.
