NICOSIA, July 2 (Xinhua) -- The lockdown imposed in mid-March to prevent the spread of COVID-19 hit Cyprus economy the hardest in May, according to a survey conducted by the Economic Research Center (ERC) of the University of Cyprus reaching here on Thursday.

It said that the Cyprus Composite Leading Economic Index (CCLEI) declined in May to 95.5 points, which corresponds to a reduction of 11.8 percent on a year-on-year basis.

"The negative year-on-year growth rate of the CCLEI confirms that the domestic economy was faced with an unprecedented contraction attributed to the temporary closure of the economy," the survey added.

However, it stated that the effects "are most likely to be temporary" as the economy is expected to recover in the third quarter, according to a flash estimate of the Index in June.

ERC noted that the Economic Sentiment Indicator (ESI), which contracted for three consecutive months since the pandemic started spreading in European Union countries in February, has already shown signs of improvement in May and June.

This, along with the increased value of credit card transactions announced by Hellenic Bank, reflects the restart of the economy, the survey said.

However, the restart is still weak, as indicated by a negative inflation. Cyprus Statistical Service announced on Thursday a deflation of 1.99 percent in June, relative to June of 2019. Deflation in May on a year-on-year basis was 1.47 percent.

Inflation marked a negative increase of 0.25 percent for the first six months of this year, it added. Enditem

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