Greeks Shake off Pessimism Despite Economic Woes

Greeks Shake off Pessimism Despite Economic Woes

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Greece bail-outGreece registered a 93.8 reading on the European Commission΄s economic sentiment index, putting it above northern European peers Austria, Finland and Denmark, and well above the eurozone average of 89.4.

Greece was among the steepest risers in the survey, which gauges consumer and business confidence, suggesting that pessimism is waning fast as the population pegs hopes on recovery.

But according to “Telegraph” economists warned that the upward trend in Greek sentiment could be fragile amid growing signs the economy is still far from shaking off recession.
“It seems pretty encouraging, but I would treat these figures with a degree of caution,” said Ben May, Europe economist at Capital Economics.
“Despite a pick-up in sentiment which began last year when the bail-out was resurrected, first quarter GDP has not registered an improvement.”

He suggested that Greeks could be anticipating an easing in credit conditions as banks get recapitalized, or that lower borrowing costs on the government could be lifting sentiment.

Earlier this month the European Central Bank cut its key interest rate to a record low of 0.5pc in a bid to boost lending in the eurozone. However, Greek banks have largely failed to pass on the benefits of rate cuts to their customers.
(source: Telegraph, Capital)