The economic climate index recorded a further decline in June, closing at 106.1 from 107.0 units the previous month, marking the lowest level of the past 10 months, according to IOBE’s business climate survey. The drop is attributed to weakening industrial expectations and declining consumer confidence, while conditions stabilize or improve in other sectors.
“The economy is navigating a period of intense uncertainty, mainly driven by international developments such as trade protectionism and related agreements,” the IOBE report states. “At the same time, domestic consumption resilience, promising tourism inflows, and high levels of unexecuted construction projects offer cautious optimism for services, retail, and construction sectors.”
However, households have become more pessimistic, as reflected in the consumer confidence index. Consumer forecasts regarding their personal financial situation over the next 12 months have deteriorated, with 56% expecting a slight or significant worsening, compared to only 6% anticipating minor improvement. Similarly, expectations regarding the country’s overall economic condition have worsened, with 61% predicting deterioration versus 25% expecting stability.
In detail:
– **Industry**: The negative balance in assessments concerning orders and demand slightly intensified, while inventory estimates marginally improved, and positive production outlooks were mildly reduced.
– **Construction**: Mildly negative projections regarding company work programs softened and turned positive, while employment expectations also saw slight strengthening.
– **Retail Trade**: Assessments of current sales strengthened significantly, inventory levels remained stable, but short-term sales projections weakened slightly.
– **Services**: Positive evaluations of the current business situation and present demand increased slightly, though expectations for short-term demand development declined sharply.
– **Consumer Confidence**: Negative household forecasts about the national economic situation and personal finances intensified, alongside weaker intentions for major purchases and savings plans.