IOBE: Weaker Economic Climate for Greece in June

Athens, Greece

The economic climate in Greece dropped in June to 87.6 points from 88.5 points in May, according to a study released by the country’s leading think-tank, the Foundation of Economic and Industrial Research (IOBE).

According to IOBE, expectations in industry and services decreased slightly in June, while construction and retail trade showed signs of improvement after the sharp decline in previous months due largely to Covid-19.

Consumer confidence also picked up marginally after a sharp decline in the previous months to May with most households less pessimistic about their finances over the next 12 months as well as about the overall economy in Greece.

“All sectors of production as well as households are in the process of adapting to the new reality, which still involves many uncertainties,” said IOBE.

“The deterioration of the climate in the Greek economy is proving to be more gradual than many others in Europe, where there has been a sharp initial deterioration but then a relative improvement, possibly due to the more closed nature and rigidity of their economies,” IOBE said.

The think-tank’s analysts note that economic conditions in Greece and the “recession in the coming months will depend on a number of domestic and foreign factors” including economic policy interventions at national and European levels and “mainly how these will be implemented in practice”.

IOBE goes on to add that the upcoming trimester will determine the developments in the Greek economy.

Meanwhile, last month Reuters reported that Greece’s finance minister expected the economy to shrink by up to 13 percent in 2020 under baseline scenarios and in view of the coronavirus impact.

Before the outbreak of Covid-19, the IOBE had forecast growth for the Greek economy by 2.2-2.5 percent in 2020 from 2.1 percent in 2019.