IOBE: Economic climate to worsen in March

IOBE: Economic climate to worsen in March

Athens, April 1, 2015/ Independent Balkan News Agency

By Spiros Sideris

Worsening of the economic climate in Greece is recorded in March with the relevant indicator to dropping to 96.8 points from 98.2 points in the previous month, according to an economic survey of the Greek Foundation for Economic and Industrial Research (IOBE).

Unlike the previous recording of the indicator, this time the business confidence and consumer confidence are moving in the same direction, note the analysts.

Relative increase of pessimism about the state of the economy is recorded in almost all sectors, especially in services and construction.

“The recovery of bad forecasts can be attributed to the tight credit conditions and the sustained high uncertainty about the general state of the economy. Many crucial questions remain open, as there is the pending agreement with European partners and creditors, and in addition to that its content that cannot yet be evaluated by citizens and businesses”, says IOBE.

Overall, the economy seems to be on standby, before the eventual formation of new conditions that will define, at least in the short term, the framework of decisions and expectations of citizens and businesses. Specifically:

In industry, the production forecasts for the coming months are improving, with the balance in the estimates for stocks remaining unchanged, but the estimates for orders and demand to weaken further.

In services, the estimates for the current and short-term demand deteriorate, while the estimates for the current business situation are worsening.

In retail trade, the negative estimates of current sales are not changed, but the forecasts for the short-term evolution worsen again. At the same time continues the liquidation of inventories.

In construction are recorded unfavorable estimates for planned operations of businesses and more pessimistic forecasts for employment in the sector.

In consumer confidence, the forecasts for the financial situation of the household do not change, while those on the economic situation of the country in the next 12 months are improving, as with the intentions for savings, with forecasts for unemployment trends to worsen marginally.

Further improvement in the economic climate in the EU and the Eurozone.

The economic climate in March improves mild compared to February, both in the EU and the Eurozone, with the relevant indicator respectively gaining 0.9 and 1.6 points, reaching the 106.1 and 103.9 points, over the levels of the long-term average in both cases.

In the Eurozone, the rise of the index stems from the improvement in consumer confidence, with business expectations in retail trade, services, construction and especially in industry, strengthening as well. Specifically, in the industry the relevant index gains 1.7 units, 0.7 units in services, in construction 0.9 units and 0.6 units in retail.

The largest growth is recorded in consumer confidence in March in the Eurozone (3.0), while at the country level, the overall expectations are improving in Spain (1.7), Italy (2.4), Germany (1 , 8), the Netherlands (0.9) and marginally in France (0.4).

In the EU, the economic climate also improved, but milder due to the deterioration of expectations in the two largest economies outside the eurozone, namely in the United Kingdom (-2.7) and Poland (-0.4).

At the sectoral level, consumer expectations and the climate in retail trade follow the respective eurozone trends, while in construction the climate deteriorates. At the same time in services and industry there is a marginal improvement.