IOBE: Strong deterioration of the economic climate index in April

The economic climate index stood at 105 points in April, significantly lower than the previous month (112.1 points) and at the lowest level of the last 12 months.

According to IOBE economic research, business expectations have deteriorated sharply in services, construction and industry and relatively less in retail. Among the sub-sectors of services, land transport is showing the strongest decline, under sharply increased fuel costs. It is noted that expectations in the retail trade deteriorated in April for the fourth consecutive month, as inflationary pressures, which already began in the autumn, escalate after the invasion of Ukraine.

The effects of the war, according to the survey, are mainly reflected in consumer confidence, as after the sharp fall in March, from the low level it was, it fell further in April. As a result, it was at its lowest level since August 2017. As the war in Ukraine continues, with no indication of how it will end soon or how sanctions against Russia will be lifted, the relevant developments will be the main factor shaping the situation in Greece. and the global economy in the coming months. Uncertainties arising from developments now strongly affect businesses and consumers, with policy interventions, at national and international level, being able to mitigate the effects only to a degree. In addition to the war in Ukraine and its effects on energy costs and inflation, the economic climate will soon be affected by developments on the pandemic front, where data are currently showing significant improvement, and the course of tourism as it approaches the summer. In more detail:

In industry, the mildly positive balance of estimates for orders and demand has fallen sharply, stock estimates have escalated sharply and positive output forecasts for the coming months have strengthened marginally.

– in construction, negative output forecasts strengthened significantly, while employment forecasts improved slightly.

In retail trade, estimates for current sales fell slightly, with inventories escalating significantly, while forecasts for short-term sales weakened slightly.

In services, positive assessments of the current state of business fell sharply, those of demand weakened more slightly, while forecasts for short-term demand deteriorated sharply.

– in consumer confidence, the negative forecasts of households for the economic situation of the country strengthened slightly, while those corresponding to their own financial situation within a year improved slightly. At the same time, estimates for major markets fell sharply and the intention to save significantly weakens.