A significant improvement was recorded in Greece’s economic climate in May, with the economic sentiment index reaching 107.5 points, up from 105.8 points in April, according to the IOBE economic conjuncture report.
The increase is mainly attributed to improved expectations in industry, construction, and consumer confidence, while the data on the tourism sector is of particular interest.
IOBE notes that domestic economic activity is positively influenced by inbound tourism, as an increase in travel receipts from abroad was recorded at the beginning of the year.
The most significant change in the services sector is observed in hotels, restaurants, and travel agencies, where the business expectations index surged to 125.2 points in May, up from 104.3 points the previous month.
The improvement is reflected both in assessments of the current business situation and in demand expectations. Negative assessments of business performance turned positive, while a similar picture was observed for current demand. At the same time, short-term demand forecasts strengthened significantly, rising to +63 points from +36 points in April.
Expectations for employment in the sector also remain positive, as the relevant index stood at +47 points, confirming that tourism businesses continue to seek staff ahead of the peak summer season.
At the same time, inflationary pressures continue to be a source of concern. IOBE notes that price-related indicators remain at high levels, while uncertainty linked to developments in the Middle East continues to affect economic expectations.
In the overall services sector, the business expectations index edged down slightly to 110.6 points from 112.8 points in April. However, the tourism picture differs significantly, recording one of the strongest improvements among all individual sectors of the economy.
According to IOBE, the performance of tourism is a key factor supporting economic activity at present, although a potential slowdown in economic growth could affect business and consumer sentiment in the coming months.
