The Cyprus Composite Leading Economic Index (CCLEI) based on the Aruoba, Diebold, and Scotti (ADS) (2009) model approach (CCLEI_ADS), exhibited a Year-over-Year (YoY) decrease of 3.5% in November 2019 reaching a level of 111.3, following decreases of 3.9% in October, and 4.0% in September (using the updated data) and thus continues to signal downward, albeit weaker, pressures on economic growth.
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The downward pressures on the CCLEI are mainly a result of the YoY reduction in the Euro Area Economic Sentiment Indicator and the YoY increase of the Brent Crude Oil price in November 2019. It is note that in the international economic environment the recent encouraging developments (e.g. the trade agreement of US and China and the positive outlook in the manufacturing in Germany) are expected to have a positive impact on the Index. In the domestic economic environment, the local electricity production growth rate has marked a relatively small YoY negative growth rate in October 2019. In contrast, the YoY positive performance of the rest of the domestic indicators, in particular, credit card transactions and tourist arrivals through November 2019, and the retail sales volume and number of authorized building permits through October 2019 have contributed to a smoother reduction of the Index.
In summary, the recent downward trends in the CCLEI are mostly due to the external environment, which in conjunction with the YoY positive performance of most of the domestic variables, are in line with the forecasts of international and domestic organizations for the Cypriot economy, which is expected to continue expanding but at a slower pace.