A marginal weakening was recorded in June in economic sentiment, with the relative index standing at 110.6 points, compared to 111.0 points in May.
According to a study of the economic situation of Foundation for Economic and Industrial Research (IOBE)the decline comes from two business sectors, manufacturing and retail trade, while the consumer confidence index is strengthening modestly, as are the services and construction sectors.
The factors that shape the climate
The climate, as highlighted by IOBE, is shaped by several factors. As highlighted in the relevant analysis, the results of the European elections have caused an increase in political and economic uncertainty in Europe, which seems likely to continue in the future. In our country, they have affected the political environment, leading to government restructuring, albeit on a relatively limited scale. Any effects on economic policy should be observed from the autumn onwards.
Meanwhile, the summer season is already generating increased incomes due to the strong performance of tourism and expectations that, overall, the effect on incomes and employment in various sectors will be strongly positive. Inflation is gradually de-escalating. However, the issue of austerity still worries citizens, as 58% of households expect prices to rise again at the same or faster pace and 61% say they are “barely surviving”. In the coming months, the economic climate will be affected by the rate of income growth as well as the prices of goods and services.
In more detail:
- at the Industrythe negative balance of orders and demand estimates has narrowed significantly, stock estimates have strengthened slightly, while positive forecasts for production in the coming months have faded.
- at the Constructionsnegative forecasts for business work programs were significantly reduced, while positive forecasts for employment were significantly strengthened.
- at the RetailCurrent sales estimates are weakening slightly, with inventories stabilizing and near-term sales forecasts trending sharply downward.
- at the servicespositive estimates for the current situation of economic activity are increasing significantly, while estimates for current demand are weakening marginally, with forecasts for short-term demand developments strengthening slightly.
- in Consumer confidencehouseholds’ negative forecasts for the country’s economic situation strengthened, while corresponding forecasts for their own economic situation remained optimistic. At the same time, forecasts for key markets improved significantly, while saving intentions weakened.