The economic climate index in Greece fell in July and stood at 101.1 points, lower than the previous month (104.1 points), as well as compared to July 2021, according to the IOBE Economic Situation survey.
At the European level, downward trends also prevailed, both in the EU and in the Eurozone.
Business expectations fell mainly in Construction, while changes were milder in Services and Industry. The relative index in Retail Trade showed an increase, continuing its fluctuations during the last months.
As IOBE reports, the protracted energy crisis and the slowdown of recovery in the EU and other economies during the second quarter are now putting significant pressure on Industry demand. On the other hand, the dynamics of Tourism remains particularly strong, based on expectations in the sector, with whatever wider positive effects this development entails for businesses and households. In Retail Trade, the household support interventions, combined with the saving of previous years, support the current activity of the sector.
However, uncertainty over the duration of the war, and especially its impact on energy costs, worsened households’ forecasts for general economic conditions over the next 12 months, but also for their financial situation this period. As a result, Consumer Confidence weakened again, to a five-year low.
Now, it seems that the support measures only to a certain extent ease the concern of households about economic developments in the medium term. The importance of strategic policy interventions, at national as well as European level, to safeguard the prospects of the economy in the medium term emerges anew. The relevant priorities include securing the energy supply, the more efficient use of available means of energy production, the development of networks for the operation of alternative supply chains and, in general, the strengthening of the productive prospects of the economy.
In more detail:
* At Industrythe mildly negative balance of orders and demand estimates eased slightly, inventory estimates rose sharply, and positive forecasts for output in the coming months were marginally strengthened.
* At Constructionsthe negative forecasts for production strengthened significantly, while at the same time forecasts for employment weakened significantly.
* In the Retailestimates for current sales have improved significantly, with inventory leveling off sharply, while forecasts for near-term sales growth are easing slightly.
* At Servicespositive estimates for the current state of business moved sharply upward, those for demand changed mildly, while forecasts for the short-term development of demand fell noticeably.
* In Consumer Confidence, households’ negative forecasts for the country’s economic situation strengthened significantly, in contrast to the corresponding ones for their own financial situation within a year which strengthened slightly. At the same time, forecasts for major markets improved significantly and the intention to save significantly weakened
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