ECONOMY

Sentiment rises after 4-month drop

Economic sentiment in Greece improved in June, after sliding for the past four months, with positive signs on the budgetary front helping to improve the mood in all sectors apart from retail. The Foundation for Economic and Industrial Research (IOBE) said yesterday Greece’s economic sentiment rose to 63.8 units in June from 61.9 units in the previous month, on improved business expectations in the construction, services and industrial sectors. In January, the index stood at 76.1 units, the highest level seen so far in 2010. «Despite the improvement, pessimistic sentiment prevails and is only not getting worse,» think tank IOBE said in a statement. «It is possible that some signs of stabilization may appear for at least the next three months, on the condition that positive developments on the course of the budget are confirmed,» it added. The monthly change in Greece reflects an improvement in sentiment in the eurozone, where the index rose to 98.7 units in June from 98.4 units in the previous month. Sentiment in retail trade in Greece remains at historic lows, said the report, adding that forecasts for the sales period are at exceptionally low levels as stock piles grow. Consumption spending, which accounts for more than 70 percent of Greece’s gross domestic product, has fallen sharply after recent austerity measures cut pensions and civil servants’ pay while repeated tax hikes have eaten into household incomes. Consumer expectations as to how they see their economic future remained at the record lows seen in May along with their views on labor market developments, IOBE added.