Greek Economic Sentiment Rises to Highest Since 2009Paul Tugwell
Greek economic sentiment improved in March to the highest since October 2009, when the disclosure of a budget blowout triggered what has become the euro-area financial crisis.
An index measuring short-term economic trends climbed for a second month to 88.1, up from 86.9 in February, as funding flowing under international bailouts prompted an influx of bank deposits and payment of government arrears, the Foundation for Economic & Industrial Research, known as IOBE, said in an e-mailed report today. Consumer confidence rose slightly to minus 71.2 from minus 71.4, the Athens-based foundation said.
While the Greek economy is in its sixth year of recession, government payments of past-due bills, increased investment activity and the return of deposits to the banking sector all had positive effects on sentiment, IOBE said.
Greece paid 2.3 billion euros in state arrears by the end of February, alternate Finance Minister Christos Staikouras said Feb. 28 while deposits at Greek lenders rose to 164 billion euros ($210.1 billion) in February from 161 billion euros in January, the country’s central bank said March 28.
“Businesses and households are adjusting to the new economic conditions,” IOBE said. “Consumer confidence remains at a very low level, however, with being made unemployed the main fear in society as long-term joblessness increases.”
Economic sentiment may be damped by the bailout in Cyprus, with most of the research for March’s report conducted before the east Mediterranean island concluded a loan deal with the International Monetary Fund, the European Central Bank and the European Commission that saw depositor losses, the closure of the country’s second-largest lender and the sale of all Greek units of Cypriot banks, IOBE said.