BUSINESS

Sentiment returns to pre-crisis level

Economic mood recovers on consumer confidence rise and forecasts for industry and construction rebound

The economic mood in Greece has returned to pre-recession levels as the sentiment index of the Foundation for Economic and Industrial Research (IOBE) rose from 94.8 points in February 2014 to 97.5 points last month, the highest since summer 2008, it was announced on Wednesday.

The survey also recorded a rebound in business expectations in industry and construction, a decline in retail commerce and relative stability in services. After two months of decline, consumer confidence is also on the rise, having reached the highest level seen in four years, although it remains in negative territory – i.e. below 100 points.

IOBE has gleaned positive messages regarding the course of the economy as well as specific developments such as the successful completion of the negotiations with the country’s creditors without any new measures for this year, and the handing out of benefits to social groups thanks to 2013’s positive fiscal results, which are having a favorable impact on expectations among both citizens and enterprises.

Nevertheless IOBE stressed that the abovementioned conditions do not mean that the financial difficulties of previous months have gone away, as they continue to exist largely as cumulative effects of the crisis.

In terms of consumer confidence, forecasts regarding the state of household finances and the country’s economy for the next 12 months have recorded a notable rise, while intentions to save money remain virtually unchanged, with the negative expectations concerning unemployment having been contained.

The constant slowdown of the economic contraction, reflected in official fiscal figures, is creating expectations that the economy will stabilize, with possible benefits for employment.

In industry, the forecasts for short-term growth in output are gaining ground, while estimates about the current level of orders and demand are slightly weakening. In the service sector the enterprises’ estimates regarding their current activity and demand are deteriorating, but this is offset by growth forecasts for demand in the near term.

Negative estimates for retail commerce are strengthening, while the negative outlook for construction remains stable although the sector’s employment index is on the rise.

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