Macro roundup: Good vibes (for some)
Greek economic confidence is at a 21-year high. But not everyone's feeling it
Economic sentiment in Greece in November increased to the same level it was in February 2020 – which in turn was the highest since 2000, when the country rode a wave of optimism over imminent entry into the euro area.
Improving sentiment has been quite narrowly based, however, with several sectors not recovering to their pre-pandemic levels, according to the European Commission’s economic sentiment indicator. The upswing over the past year has been driven by construction and, in recent months, by services.
Overall, the ESI rose to 113.4 in November, exactly where it was just before the first lockdown — and 0.5 points above the highest level reached in 2007, before the financial crisis plunged it to a low of 79.3 in August 2015.
Consumer confidence and retail are among the sectors that are taking longer to recover — especially the former — despite strong retail sales figures in recent months.
The latest data showed retail sales increasing 13 percent in September compared with the same month a year earlier. Volume grew 10.1 percent, so that’s still double-digit growth even after adjusting for the pick-up in inflation.
In case there were any doubt, it’s not just base effects either. Both turnover and volume indices are higher than they were pre-pandemic. Seasonally-adjusted turnover and volume also both increased on a month-on-month basis from August.
The producer price index increased 23.5 percent in October from a year earlier, compared with 19.9 percent in September. This was predominantly driven by energy, where the increase was 46.4 percent. Intermediate goods increased 9.3 percent and capital goods 6.5 percent.
The manufacturing purchasing managers index for November dipped slightly to 58.8 from 58.9 in October. Any reading above 50 indicates an improvement in operating conditions for the manufacturing sector.
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Next week’s key releases
Monday, Dec. 6:
Third-quarter gross domestic product (Elstat)
Wednesday, Dec. 8:
October commercial transactions (Elstat)
Friday, Dec. 10:
November inflation (Elstat)
October industrial production (Elstat)
Elsewhere on the web
The European Commission has added an economic uncertainty index to the business survey. Here, they explain the new indicator.
The IMF has a paper, and accompanying blog, looking at 40 years of domestic sovereign debt restructurings. The fund predicts that these will become more common in future, and will need to be treated carefully. Among the lessons it draws from the 2012 Greek restructuring is the need to pair domestic bank losses with a strategy to rebuild their capital buffers.
An EIB survey suggests that European firms have used the pandemic to accelerate their transformation, particularly in digital.
Here’s another survey, of compensation at Greece’s tech startups.
Jumbo better get ready for some competition. Polish discount store chain Pepco is coming.
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