GKI Economic Research Institute's economic sentiment index finally shows slight increase

In August, consumers and the business sector expressed more optimistic views on the economic situation than in July, according to a recent survey by GKI Economic Research Institute. As a result, economic indicators have moved away from their lows for the year.

After falling by 2 points in July, GKI's business confidence index rose by 2 points in August compared to the previous survey, returning to its June level. There was positive news from all four sectors, with sectoral confidence indices rising to varying degrees compared to July. The construction industry remains the least optimistic sector, while business services remain the most optimistic.

Although the business confidence indicator is still historically low,

the fact that it has moved away from its lowest point since the outbreak of the Covid crisis raises the possibility of a trend reversal.

The employment indicator, which shows the overall staffing expectations of businesses, has been falling steadily for over a year. This unfavorable trend broke in August, with companies' overall outlook reflecting slightly greater optimism than in July. In the next three months, 7% of businesses plan to increase their workforce, while 12% plan to reduce it. The two most optimistic sectors are industry and services.

The predictability of the business environment also improved slightly, reaching a five-month high. Industrial companies continue to suffer the most from the lack of predictability, while business service providers suffer the least.

In July, the price indicator stopped its continuous decline that had lasted for many months. In August, there was no significant change in this area. In the next three months, 17% of companies would like to raise prices, while 7% are preparing to reduce them. The good news for consumers is that the intention to raise prices in the retail sector has fallen to a fifteen-month low.

The GKI consumer confidence index was more than 2 points higher in August than in July. This brought the indicator to a four-month high. All components of the index showed improvement. The population assessed their financial situation over the past 12 months as noticeably better, while their financial outlook for the next 12 months improved slightly. In addition, they expected the country's economic situation over the next 12 months to be more favorable than they did in July. The assessment of disposable income for high-value consumer goods also improved. The population's inflation expectations rose slightly. Fear of unemployment decreased compared to the seventh month of the year.

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