Macro roundup: Sinking feeling
A sharp fall in Greece’s economic sentiment indicator in April brought the reading exactly in line with the average for the rest of the euro area.
The drop in the reading, released by the European Commission, from 112.1 in March to 105 was the biggest single-month decline since May 2020, when the country was in the midst of the initial pandemic lockdown.
It’s clear that sentiment now is being driven by the inflation crisis. The Hellenic Statistical Authority will release the latest inflation data next week; Eurostat’s release of Europe-wide data gave a preview last week, estimating Greek consumer price growth at 9.4 percent.
Consumer confidence is particularly downbeat: the reading of -55.3 is the lowest in the European Union. But last month’s sharp decrease was most marked in services, which was the major driver behind last year’s improvement in sentiment.
Inflation is at the top of the political agenda, with the government this week announcing it has earmarked 4.3 billion euros for measures to the energy crisis and rising prices.
A poll by Alco conducted in the last week of April showing 60 percent of respondents saying it was the issue that concerned them the most. The pandemic, by contrast, was cited as the biggest worry by just 5 percent of respondents, behind both the war in Ukraine ( 24 percent) and relations with Turkey (6 percent).
Other data
Greece’s manufacturing purchasing managers’ index rose slightly to 54.8 in April from 54.6 the month before. A reading above 50 signals improving operating conditions. However, the expansion of production was the slowest in its 13-month growth sequence, according to S&P Global.
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Next week’s key releases
Tuesday, May 10:
April consumer price index (Elstat)
March industrial production (Elstat)
Thursday, May 13:
March import price index in industry (Elstat)
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