Economic sentiment on a five-year high

Economic sentiment in May reached its highest point in the last five years in Greece, according to Eurostat data released on Thursday. The Greek economic sentiment index appears to be steadily continuing a rising course which started in January, reaching 93.8 points this month, as there has been an improvement in all sectoral business expectation indices.

The rise of the index mainly reflects stability in the main sectors of economic activity combined with the abatement of fears that Greece may exit the eurozone and prospects of a return to growth next year.

In April the index had stood at 89.2 points and in January it was eight points below this month’s reading. The previous high of the last five years was posted in October 2008, at 92 points.

Business expectations in the industrial sector improved by 4.4 points within one month and in services by 9.6 points thanks to optimistic forecasts for tourism. Retail commerce expectations rose 11.5 points and sentiment improved by 4.4 points in construction. Consumer confidence climbed 8.4 points.

Also on Thursday the global competitiveness chart of the International Institute of Management Development (IMD) showed that Greece has climbed four places, from 58th to 54th spot in 2012, among the 60 countries surveyed. This is mostly attributed to reforms regarding the operation of enterprises and to export growth, as well as Greece’s improving image abroad.

Despite its efforts to reduce bureaucracy, Greece remains at the wrong end of the chart due to having the lowest per capita gross domestic product, the high jobless rate among young people, and its second-to-last position in attracting foreign direct investment.