The economic climate index rose slightly in June, reaching 108.3 points, up from 107.7 points in May, according to a statement from the IOBE.
This improvement stems from stronger expectations in Retail Trade and Services, while the other sectors—Manufacturing and Construction—showed a slight decline, and consumer confidence remained at the previous month’s levels.
In Construction, the upward trend of recent months has come to a halt, mainly due to private construction, while Retail Trade has seen a significant improvement, driven by mildly optimistic assessments of current and future sales.
The services sector is showing a marked improvement, driven by optimistic forecasts across all the individual components that make up the relevant index. In the industrial sector, expectations for production in the coming months have weakened significantly.
On the household front, Greek consumers are expressing slightly more optimistic forecasts regarding their household finances compared to the previous month and regarding the country’s overall economic situation, but their intention to make major purchases has declined sharply, with the result that overall consumer confidence remains unchanged.
The crisis in the Middle East remains the main source of uncertainty for the European economy, particularly through inflation, a fact reflected in the ECB’s interest rate hikes. The ceasefire and interim agreement between the U.S. and Iran are leading to a significant easing of pressures on energy markets.
The smooth resumption of shipping operations is a critical factor in further reducing pressures on international trade and inflation. The rise in production costs in recent months has led to price increases, affecting households’ disposable income.
In the tourism sector, although we are in the peak season, the decline is currently estimated to be minor. The economic climate in the coming months will be influenced, on the one hand, by whether the crisis in the Middle East comes to an end and, on the other hand, by domestic trends, particularly in light of the upcoming election season.
More specifically:
- In the manufacturing sector, the balanced outlook for orders and current demand weakened slightly; the positive outlook for production in the coming months declined slightly; and inventory levels remained essentially unchanged.
- In Construction, positive expectations regarding firms’ work schedules weakened slightly, while positive expectations for employment declined more sharply.
- In Retail Trade, positive assessments of current sales strengthened slightly, as did forecasts for their short-term development, with inventory levels declining modestly.
- In the services sector, positive assessments of the current business situation improved slightly, as did positive assessments of current demand, while forecasts for short-term developments rose sharply.
- Regarding consumer confidence, households’ negative expectations regarding the country’s economic situation moderated, as did those regarding their own financial situation. At the same time, expectations regarding major purchases declined sharply, while the intention to save improved slightly.