The upcoming Easter holiday season combined with the activation of the “Easter basket” and the “Godfather’s basket” during the month, as well as the positive messages for tourist traffic, strengthen the hopes of the commercial world for the best possible result .
The market is expecting stimulatory injections of liquidity after a sluggish first quarter of 2024 with low turnover for commercial businesses. Inelastic spending such as higher housing costs, more expensive food and more expensive fuel is leaving households with no room for other expenses with traders talking about a “numb” market as a whole.
At the same time, controls on the market are being intensified by the state in order to deal with the phenomena of profiteering.
In this context, the Ministry of Development recently announced the imposition of fines totaling 1,380,000 euros for unfair profiteering on 13 companies.
“The battle of our government and the Ministry of Development to effectively combat the exactness and inflation of greed is continuous. We are not going to show any tolerance, we continue and intensify, with strict controls, the punishment of profiteering throughout the market. All those who do not respect the law are found and pay dearly for every violation,” said the Minister of Development Kostas Skrekas.
He asserted that “the first positive results of the new measures are already visible with price reductions in thousands of basic products. In any case, we are not complacent, we strengthen the control mechanisms and resolutely promote their work until all distortions in the trade area are corrected and legality and healthy competition prevail in the market, for the benefit of all consumers.”
“The market has been in decline throughout the first quarter of the year. The limited income of consumers is mainly used to pay the increased rents and to the supermarkets, as a result of which purchases are limited in retail” Makis Savvidis, vice-president of the Athens Chamber of Commerce (ESA) and vice-president of the Hellenic Electronics Association, notes speaking to the Athenian-Macedonian News Agency. of Trade (GRECA).
He estimates that the increase in the minimum wage is not expected to stimulate demand as long as prices remain at high levels while tourism gradually begins to boost consumption. “Trade has placed all its hopes in tourism. Greek consumers cannot correct the liquidity deficit observed in the market. Accuracy has affected the psychology of consumers and has radically changed their buying habits”, says Mr. Savvidis.
Focusing on businesses, Mr. Savvidis is sounding the alarm for imperative measures to stimulate demand while easing burdens, so that the strongest sector of the Greek economy can grow. At the same time, he notes that the traders who are the backbone of small and medium entrepreneurship are faced with non-existent financing from the banking system, which continues to threaten the survival of businesses. At the same time, digital bureaucracy is “suffocating” SMEs, culminating in the implementation of the digital job card and the POS interface with cash registers. All these procedures burden especially small businesses with an additional cost that comes to be added to their already increased operating costs making them less and less competitive. “Small and medium-sized traders are faced with a decline in demand, an increase in operating costs, exclusion from bank lending and increased digital bureaucracy, fighting for their survival,” notes Mr. Savvidis.
The Greek consumer is under pressure
The climate in the market is highlighted by the IOBE economic situation survey. The consumer confidence index strengthened slightly in March and stood at -44.7 points, against -47.2 points in February.
Greek consumers also appear in March as the most pessimistic in the EU. There are also mild changes in expectations for the country’s economic situation and for their own. Specifically, consumers’ negative assessments of their household’s financial situation during the previous 12 months escalated marginally in March to -53.1 points (against -52.3).
68% of households assessed a slight or noticeable deterioration in their financial situation, while only 3% consider that there has been a slight improvement. Consumers’ forecasts of their household’s financial situation over the next 12 months strengthened slightly in March, with the relative index standing at -42.3 (from -45.6) points in February. 57% (out of 60%) of households expect a slight or significant deterioration in their financial situation, while 9% foresee a slight improvement. The forecasts for the economic situation of the country are also more optimistic. The negative indicator of households’ forecasts for the economic situation of their country in the next 12-months showed a slight decline in March and stood at -42.3 (from -44.6) points. 59% (from 61%) of consumers predicted a slight or significant deterioration in the country’s economic situation, compared to 19% (from 21%) who expect stability.
The IOBE survey shows a significant increase in the intention for major purchases. In particular, the intention of consumers to make important purchases in the next 12 months (furniture, electrical appliances, etc.) significantly strengthened with the relative index standing at -40.9 (from -46.3) points. 49% (up from 56%) of consumers predicted they would spend less or much less, while 4% (up from 4%) expected the opposite. The European indices were formed at -16.6 points in the EU and at -17.9 points in the Eurozone.
At the same time, there is a de-escalation of forecasts for a rise in prices. The positive index for forecasts of price changes over the next 12 months de-escalated sharply in March and stood at +23.0 points, against +32.1 points in February. 52% (up from 57%) of households expected prices to rise at the same or faster rate and 16% (up from 16%) expect stability.
Finally, the percentage of households that are uncertain about their future financial situation is increasing. In the question that assesses the degree of uncertainty of households regarding future economic developments, 59% judged in March that their economic situation can be difficult or relatively difficult to predict, up from 57% the previous month.
Source: RES-MPE
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