ECONOMY

Greeks in upbeat mood, says IOBE

The index of consumer confidence rose to 102.2 points in November, a survey by the Foundation for Economic and Industrial Research (IOBE) released on Thursday showed, indicating that Greece’s robust growth prospects are fueling a feel-good mood. The improvement in Greek consumer confidence last month to 102.2 points from 101.9 in October contrasted with the general gloom in Europe. The corresponding index for the 15 countries in the EU remained flat at 99.1 points while the eurozone indicator posted a dip to 98.6 points. The European Central Bank earlier this week downgraded its GDP growth forecast for the eurozone to 1.1 percent-2.1 percent, a full 1 percent revision, pointing to stubborn downside risks to economic growth. The eurozone is expected to see a meager 0.8 percent rise in GDP this year. Greece is aiming for 3.8 percent growth this year, while national output in the next four years is projected to average out at 3.8 percent. Based on strong GDP figures in the third quarter of the year, full-year growth could even overshoot the target, the Finance Ministry said last week. Other leading indicators have been equally robust. The purchasing managers index, a composite indicator of manufacturing business conditions, rose to 53.2 in November from 51.9 in the previous month, underlining the improved business conditions. Industrial output in the January-October period rose 1 percent while the retail sales index in September soared by 12.3 percent. The jump in November consumer confidence came principally from the construction sector, with the sector’s business expectations index rising to 133.8 points last month from 126.5 in October, IOBE’s survey showed. Companies sourced their higher expectations to the increased workload, higher than normal for October. Relatively cheap borrowing costs in the last two years have fueled a construction boom which has yet to level off. Businesses in other sectors were less upbeat. Concerned by weaker-than-normal sales, the retail sales sector was cautious, with the business expectations index staying flat at 102.3 points. Manufacturers pointed to lower orders and a drop in capacity as factors for pessimism. The sector’s business expectations index stayed at 104.6.