Slight decline in the economic climate index in March

The Greek economic sentiment index declined to 106.8 points in March from 107.6 points in February.

According to the Economic Outlook survey released by the Foundation for Economic and Industrial Research (IOBE), this decrease is attributed to the weakening of expectations across all business sectors, as well as in consumer confidence.

In construction, the upward trend observed in private projects in recent months has come to a halt, while in retail trade there has been a significant deterioration, mainly due to pessimistic assessments of the current situation and weaker expectations for orders in the near term. Services recorded a significant decline, driven by negative assessments across all sub-components. In industry – which has a stronger influence on overall economic sentiment – expectations showed a milder negative adjustment.

As regards households, Greek consumers remain the most pessimistic in the EU, expressing even more negative expectations regarding their household finances compared to the previous month, as well as for the overall economic situation in the country. Their intention to make major purchases has also weakened slightly. According to the IOBE survey, the initial effects of the war in the Middle East have already begun to emerge, with developments in the coming period expected to be characterized by heightened uncertainty. Rising and highly volatile energy prices, along with inflationary pressures, are affecting both households and businesses, while the government is rolling out initial support measures to address energy costs. The duration of this new crisis—particularly whether any signs of stabilisation will emerge – will be a critical factor in shaping economic sentiment in the coming months.

In detail:

– in industry: The negative balance of expectations regarding orders and current demand widened slightly, the positive outlook for production in the coming months weakened marginally, while inventory levels declined moderately.

– in construction: Mildly positive forecasts for companies’ programs dropped sharply, while positive employment expectations weakened slightly.

– in retail trade: Moderately positive assessments of current sales weakened, inventory levels edged up, and short-term sales expectations declined marginally.

– in services: Positive assessments of the current business situation weakened significantly, as did views on current demand, while short-term demand expectations deteriorated further.

– in consumer confidence: Negative expectations regarding both the country’s economic outlook and households’ own financial situation intensified. At the same time, intentions for major purchases remained broadly stable, while savings improved slightly.