The Greek economy went again on a downward slope in May, according to a survey by the Foundation for Economic & industrial Research (IOBE).
The economy index fell to 91.4 points, compared to 92.7 points in April. The new, negative development is the result of deterioration of business expectations, especially in construction and services, and a decline in consumer trust.
There was no cash inflow in the Greek market in May. Instead there was internal borrowing on the part of the Greek government and delay of repayment of state debts to suppliers. Thereby, the Greek market faced a serious liquidity problem.
At the same time, the climate of uncertainty created by the stalling in negotiations between Athens and international creditors has put the lid on expectations. Businesses and individuals are in a continuous state of waiting to assess the new situation arising from a possible short-term or long-term agreement.
Specifically, regarding consumer trust, projections for the next twelve months are that the economic situation and unemployment will get worse, while the intention for more savings in the bank has improved slightly.
In manufacturing, projections show growth in production, while estimates for supply and demand have also improved slightly.
In the service industry, forecasts are negative in the short run at least, while the previously negative forecasts for the current state of businesses is improving slightly.
Forecasts in retail show slight improvement, as well, especially in the short run.
Finally, in the construction industry there is a sharp decline that also reflects in high unemployment figures in the sector.