Μake us preferred on Google Greek consumers were the most pessimistic in the European Union in October, as confidence weakened further amid growing concerns about household finances, the national economy and the cost of living.
According to the latest economic sentiment survey by the Foundation for Economic and Industrial Research (IOBE), Greece’s consumer confidence indicator fell to -48.9 points in October, from -41.6 in September.
Romania and Bulgaria followed, with readings of -33.2 and -29.1 points, respectively. Malta was the only country in the survey to record a positive reading, at +4.9 points, indicating greater optimism among consumers. The EU average stood at -17.3 points, while the eurozone average was -17.9.
The decline in Greece reflected a marked deterioration in households’ assessments of their finances and the country’s economic outlook. Consumers also became less willing to make major purchases, while expectations about their ability to save weakened slightly.
Households report worsening financial conditions
Consumers’ assessments of their household finances over the previous 12 months became more negative in October. The relevant indicator fell to -50.4 points, from -44.4 in September.
Some 68% of households said their financial situation had deteriorated slightly or significantly, while only 2% reported a modest improvement. The corresponding indicators for the EU and eurozone stood at -13.6 and -14.6 points.
Expectations for household finances over the next 12 months also weakened, with the indicator declining to -48.6 points from -41.0. The share of households expecting their financial situation to worsen rose to 63%, from 55% in September, while just 3% anticipated a slight improvement.
Consumers were also more pessimistic about the country’s economic prospects. The indicator measuring expectations for the national economy over the next 12 months dropped to -54.3 points, from -45.7.
Seven in 10 consumers expected the country’s economic situation to deteriorate slightly or significantly, compared with 60% in September. Meanwhile, the share expecting conditions to remain unchanged fell to 20%, from 27%. The corresponding EU and eurozone indicators stood at -31.2 and -32.4 points.
Fewer consumers plan major purchases or savings
Intentions to make major purchases over the next 12 months, including furniture and household appliances, weakened considerably. The relevant indicator fell to -42.3 points, from -35.4 in September.
More than half of consumers, or 52%, expected to spend less or significantly less on major purchases, up from 46% the previous month. Only 5% anticipated spending more.
The outlook for savings also deteriorated slightly. The indicator measuring households’ intentions to save over the next 12 months declined to -65.3 points, from -61.7 in September.
Some 85% of households considered saving unlikely during the coming year, while 13% said it was likely or very likely. By comparison, the corresponding indicators were positive in the EU and eurozone, at +9.6 and +9.0 points.
The survey also found that 63% of consumers said they were just managing to make ends meet, up from 58% in September. The share of households drawing on their savings fell slightly to 11%, from 12%, while 20% said they were saving at least a little. The proportion reporting that they were in debt declined to 5%, from 7%.
Uncertainty about future economic developments also increased. In October, 61.2% of households said their financial situation was difficult or relatively difficult to predict, compared with 52.4% a month earlier.
Consumers expect higher prices and rising unemployment
Expectations for price increases over the next 12 months strengthened significantly in October. The relevant indicator rose to +44.6 points, from +35.0 in September.
Some 68% of households expected prices to rise at the same or a faster rate, while 10% anticipated stable prices, down from 14% the previous month. The corresponding indicators stood at +33.6 points in the EU and +33.9 in the eurozone.
Expectations for unemployment also became more negative. The indicator measuring anticipated changes in unemployment over the next 12 months increased to +22.6 points, from +18.2 in September.
Four in 10 households expected unemployment to rise slightly or significantly, while 7% anticipated a modest decline. The corresponding EU and eurozone indicators were +27.3 and +27.9 points.
Housing-related spending remains unlikely
IOBE’s October survey also examined three additional indicators on a quarterly basis, focusing on major purchases of durable goods, particularly housing and vehicles, as potential early signals of private consumption.
Intentions to buy or build a home over the next 12 months deteriorated slightly, with the relevant indicator falling to -92.7 points, from -92.3 in the previous quarter. Only 1.5% of Greek households said they might purchase or build a home during the coming year.
The reading remained considerably more negative than the corresponding figures for the EU and eurozone, which stood at -75.6 and -75.2 points, respectively.
Intentions to undertake major home improvement or renovation projects also weakened. The indicator fell to -80.6 points in October, from -75.8 in the previous quarter.
Only 5.1% of Greek households said they were fairly or very likely to make substantial home improvement or renovation expenditures over the next 12 months, down from 9.9% in the previous quarter. The corresponding indicators stood at -46.0 points in the EU and -46.8 in the eurozone.
