Consumer confidence declined to its lowest point in three-and-a-half years in April, which the Foundation for Economic and Industrial Research (IOBE) attributes to the high levels of uncertainty resulting from the ongoing bailout review and the social security and tax reform bills.
“It is obvious the economy is still going through a prolonged period of expectation, with two major issues still pending: the completion of the review of the applied bailout program, and the confirmation of the social security and income tax bills whose content will affect households and enterprises,” IOBE, which compiles the consumer confidence index, commented on Thursday upon presenting the findings of its monthly survey on the Greek economy.
“In the meantime, as those measures have not yet been implemented, it is mainly their anticipation that had a negative impact on expectations, particularly of households, leading to a significant reduction in consumer confidence,” the IOBE report added.
The drop in the consumer confidence index comes from the deterioration of all partial indices, such as that of household forecasts regarding their financial circumstances over the next 12 months, the country’s financial situation, intention of saving money and the course of the unemployment rate.
The economic sentiment index posted a minor improvement last month, reading 90.3 points against 90.1 points in March and 93.3 points in April 2015.
As far as enterprises are concerned, there was a containment in the pessimism recorded in the domains of retail commerce and of services, and the sentiment prevailing in industry was almost stable. Demand prospects in services remained unchanged but in negative territory. There was, however, a sharp deterioration in expectations in the construction sector, particularly in private construction. This is partly attributed to the decline in the employment index in the private construction sector.