All signs point to a rebound
The latest data and estimates on the course of the 2013 fiscal year are pointing to a smaller-than-expected economic contraction, while there are clear indications of a market rebound.
The primary surplus for last year is now expected to reach up to 1.5 billion euros and the gross domestic product contraction will end up below 4 percent, although the official GDP figures for the last quarter of 2013 will be published on February 14. The current account balance will show a surplus for 2013, after almost 20 years, with the official figures expected on February 19.
These figures, combined with a series of positive pieces of news from various indices, consolidate Greece’s economic improvement, which will be the main weapon in the government’s tough negotiations with the representatives of its international creditors in the coming weeks.
The latest reading of the Purchasing Managers Index (PMI), announced on Monday by Markit, showed a return to growth as it climbed above the parity level of 50 points for the first time in 53 months to reach 51.2 points in January. Markit said that factories’ new orders have resulted in a third consecutive month of output growth.
The Economic Sentiment Index of the Foundation for Economic and Industrial Research (IOBE) also showed an improvement for January Monday, as it read 92.6 points against 91.4 in December 2013, and 86.1 points in January 2013. This was attributed mostly to the improvement in business expectations in the retail, construction and service sectors.
Another indication of the improvement in consumer confidence is the increase in car sales, as the rising course that started in mid-2013 has continued into this year: Market professionals speak of a 10 percent increase in new car registrations in January from a year earlier, while orders for new cars have grown by 15 percent, which will be recorded in this month’s sales data.