Unemployment and citizens’ increased tax obligations sent the consumer confidence index to its lowest point in the last six months in September, in line with all other indices published on Thursday by the Foundation for Economic and Industrial Research (IOBE).
IOBE’s monthly gauge of the economic climate in Greece showed a 99.3-point reading in September, compared to 102 in the previous survey, dropping back to levels unseen since May, when the European and local elections took place. Despite the decline the index remains much higher than in previous years, which denotes consolidation in terms of expectations and coincides with the easing of the country’s economic contraction as seen in official statistics.
Last month’s drop is attributed to the lowering of expectations across all sectors, led by retail commerce and construction, while the mildest impact was felt in services and industry.
IOBE said the significant weakening of demand was to be expected due to citizens’ increased tax obligations and the end of the tourism season in most parts of the country after having a positive influence on a series of economic activities.
The business expectation index for industry dropped to 95.3 points in September from 98.9 points in July and 96.1 points in September 2013. Excluding corporate stock prospects, all of the index’s main components showed a decline.
Expectations in construction declined from 84.1 points in July to 72.4 points last month, due to the drop in the public works index as prospects are on the rise in private construction. Employment expectations posted a remarkable decline.
The retail commerce index dropped from 96.8 points in July to 84.8 points last month, but this was still above the 69.4-point level recorded in September 2013. Estimates regarding the current sales level are in decline, as are forecasts about their course in the short term.
In services the index fell to 90.8 points in September from 94.5 in July, as the favorable estimates on the current situation and demand from enterprises are weakening.
The consumer confidence index posted a significant drop in September to -55.8 points, from -48.1 points in July. This is seen to be the result of the deterioration in consumer forecasts for all main partial indices, particularly that concerning household finances, as well as the course of unemployment in Greece.