The average economic sentiment index in Greece in 2024 is almost 108 points, higher than the corresponding 107.6 in 2023 and at the same time the highest since the economic crisis that began in 2008, according to Foundation for Economic & Industrial Research (IOBE).

This relatively higher level of the index comes from businesses, as generally satisfactory expectations were recorded in most sectors during the year, IOBE also said in its December economic sentiment survey.

Economic sentiment declined slightly in December, with the relevant index coming in at 106.0 from 106.2 points in the previous month. This marginal weakening came from Manufacturing and Retail Trade, with Construction, Services and Consumer Confidence improving.

However, the IOBE said that December is a special month as it includes the holiday season, with activity mainly in Services and Retail Trade. In Retail Trade, however, more conservative assessments of the course of demand are made. In Services, it appears that the broader area of miscellaneous business activities, led by the consulting services sector, is moving strongly upward, in part because Recovery Fund projects are feeding the market with significant projects.

International uncertainties

International uncertainties, however, seem to be of particular concern to the manufacturing sector, the most outward-looking sector of the economy, as protectionist policies are likely to intensify in the coming period. The construction sector maintains its momentum, albeit with problems in finding labour. On the household side, an improvement in expectations was recorded for December, but overall, the consumer confidence index deteriorated on average in 2024 compared to 2023. Inflation, which has continued during the year, albeit lower, and the associated problem of price stickiness continue to have a strong impact, although the reduction in unemployment is generating income for more households.

In more detail:

• In Manufacturing, the negative balance of estimates of orders and demand intensified modestly, estimates of inventories strengthened, while positive forecasts for production in the coming months weakened.
• In Construction, negative forecasts for business activity schedules softened, while positive employment forecasts strengthened significantly
• In Retail Trade, estimates for current sales weakened markedly, with inventory levels escalating and forecasts for near-term sales growth unchanged.
• In Services, positive assessments of the current state of business improve markedly, while estimates of current demand strengthen modestly, with forecasts for the near-term evolution of demand moving sharply upwards.
• In Consumer Confidence, households' negative forecasts for the country's economic situation have narrowed, while those for their own economic situation have correspondingly softened. At the same time, forecasts for major purchases strengthened marginally, while the intention to save weakened.