NICOSIA, March 30 (Xinhua) — The Russia-Ukraine conflict has dealt a blow to the economic sentiment in Cyprus, causing a steep drop in the Economic Sentiment Indicator (ESI-CypERC), the Economic Research Center of the University of Cyprus (ERC), said on Wednesday.

It said the ESI-CypERC dropped by 9.4 points to 102.1 in March from 115.1 of the previous month.

The Economic Research Indicator is an important economic index which helps government and private economists analyze economic performance, make predictions of future performance and study business cycles.

ERC said that the deterioration of economic sentiment and the rise in uncertainty among firms and consumers were driven by external developments, namely the Russia-Ukraine conflict, the sanctions imposed on Russia and the rising international commodity prices.

It further said that “these negative developments in March resulted in large downward revisions in expectations about future activity and upward revisions in price expectations.”

Fears of possible shortages in animal feeds has prompted the Cypriot government to directly import a large quantity of maize and barley to help herd breeders cover their needs until the local harvest in May.

The government on Wednesday announced a financial assistance program to support stock breeders, because of a 70 percent rise in animal feed prices, and help farmers meet their increase expenses as a result of a rise in energy prices.

The Ukraine crisis drove petrol prices at the pump stations up by more than 40 percent and led to a rise of consumer goods prices of over 25 percent, exacerbating even more a 6.6 percent rise in inflation in February.

It also sent shockwaves among hoteliers, who stand to lose between 800,000 and one million expected tourist arrivals from Russia and Ukraine, or about 30 percent of expected tourists in 2020, according to the estimates of the Ministry of Tourism.

ERC said that the decrease in the ESI-CypERC resulted from weaker business confidence in services, industry and retail trade, as well as from confidence losses among consumers.

ERC acknowledged that the monthly research is funded by the European Union, the Cypriot Ministry of Finance and the University of Cyprus.