IOBE: Recession of economic climate and weakening of consumer confidence in June

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The latest IOBE Economic Situation Survey records a decline in the economic climate in June, with a deterioration in all sectors of the economy, except Construction, and a weakening of consumer confidence.

In particular, Mr economic climate index was formed in June at 104.3 points, clearly lower than the previous month (108.0 points), as well as compared to June 2021.

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At the European level, milder downward trends prevailed, both in the EU and in the Eurozone. Business expectations fell mainly in Industry and less in Services and Retail Trade, while on the contrary in the Construction sector, they moved strongly upwards. As the war in Ukraine continues for four months with no end in sight, the impact on supply chains and orders is being felt particularly in Industry.

A change in trend is seen again in Consumer Confidence, with the index easing slightly and hovering near a four-year low.

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Although successive bundles of interventions have been carried out for the energy crisis, the intensifying inflationary pressures are troubling households about their financial situation in the near future, based on the relevant balance in the survey. These trends highlight once again the importance of strategic policy interventions to improve the prospects of the Greek economy in the medium term. Among them, the implementation of the reforms and the investments of the Recovery Fund, systematically and in a timely manner, may be pivotal. At the same time, the strong momentum displayed by tourism will be a determinant of expectations for many businesses and households.

In more detail:
➢ in Industrythe mildly negative balance of orders and demand estimates strengthened slightly, inventory estimates climbed sharply, and positive forecasts for output in the coming months receded.

➢ in Construction, negative forecasts for output fell significantly, while forecasts for employment weakened slightly. ➢ in Retail Trade, estimates for current sales weakened significantly, with the level of inventories decelerating slightly, while forecasts for short-term sales development are slightly strengthened.

➢ in the Servicespositive estimates for the current state of business changed markedly, those for demand improved slightly, while forecasts for short-term demand developments fell significantly.

➢ in Consumer Confidence, households’ negative forecasts for the country’s economic situation fell slightly, in contrast to their own one-year economic situation which strengthened slightly. At the same time, forecasts for major markets fell slightly and the intention to save is improving slightly.

See the survey in the right column “Related Files”

Source: Capital

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