Foundation for Economic and Industrial Research: Economic sentiment index up in February

The Greek economic sentiment index improved in February, rising to 104.3 points from 101.9 in January, reaching its highest level since July 2014, the Foundation for Economic and Industrial Research (IOBE) said on Thursday.

IOBE, in a monthly report, attributed this development to improving business expectations in the construction, industrial and services sectors, only partly counterbalanced by deteriorating consumer confidence and a decline in the retail commerce sector. An improving economic sentiment index reflects positive growth rates in the economy, prevailing conditions of relative stability as an adjustment programme and recent reviews of the programme were in full swing and nearing completion.

IOBE attributed an improvement in business expectations to a positive international environment, favouring export companies and all related sectors. However, a decline in consumer confidence and in the retail commerce sector reflected pressure on the available incomes of Greek households.

IOBE said a further improvement in climate in the future depends on dealing with the significant challenges ahead, creating conditions for sustainable growth and the process of exiting the current support programme, since terms of financing the economy have not yet finalised for the period after the summer.

Business expectations in the industrial sector rose over production levels in the next few months, while negative estimates over orders and demand stabilised. In the constructoin sector, estimates over work programme improved and forecasts over employment stabilised. In the retail commerce sector, positive forecasts over current sales turned slightly negative, while forecasts over short-term developments remained unchanged with estimates over inventories falling slightly. In the services sector, positive forecasts over current condition of enterprises strengthened, along with forecasts over current demand and short-term sales.

Consumer confidence showed an improvement in the balance of forecasts over the country’s finances and saving intentions, but a deterioration in forecasts over households’ finances and unemployment.