Greek Entrepreneurs Less Optimistic, Says Grant Thornton Study

Deteriorating optimism among the country’s entrepreneurs has landed Greece at the bottom of a list of 35 countries in the latest Grant Thornton International Business Report (IBR).

Athens, Greece. Photo © GNTO/Y Skoulas

Greece is 36th (or last) on the consulting firm’s global optimism index behind Turkey and Argentina in the second quarter of 2018, despite previous signs of recovery in Q1. Currently at -28 percent, the confidence levels of Greek business owners is in the negative for a fourth consecutive year marking a new “all-time low”.

More specifically, the majority (84 percent) of business leaders surveyed cited uncertainty as the leading cause for the downcast sentiment, followed by regulations and bureaucracy (66 percent), and lack of funding (40 percent).

Economic uncertainty was also identified by 50 percent of business leaders polled as the biggest risk, marking a 22 percentage point rise from Q2 in 2018.

Meanwhile, Spain’s business executives showed signs of increased optimism ranked 12th among 35 countries.

“Without a doubt, the signs of economic uncertainty have strongly affected our country. But Greece is not the only country dealing with uncertainty, as many big European economies have shown disappointing data on entrepreneurs’ optimism,” said Vasilis Kazas, CEO Grant Thornton Greece.

According to the report, Greek entrepreneurs plan over the next year to improve the effectiveness of sales (72 percent), enhance incentives for productivity (56 percent), boost investment in marketing (38 percent), and develop new products or services (28 percent).

A total of 26 percent said they were looking to expand their business activities abroad as well as locally (24 percent), while 22 percent said they would be focusing on hiring specialist talent and seeking new sources of funding (16 percent) over the next 12 months.

Overall, IBR analysts note that following a period of heightened optimism and strong economic growth, the global outlook for businesses in 2019 “is markedly more reserved as the global economic cycle cools and political uncertainty begins to bite”.

European sentiment dropped by 18 percentage points to 28 percent against Q2 2018 data, while in the UK ahead of Brexit, optimism plummeted to 9 percent.

“The outlook for 2019 shows that there will be a return to normality with more balanced and sustainable growth for economies. But it is clear that this year won’t be as good as 2018 for businesses globally, as the economic cycle has cooled down. With the IMF predicting global economic growth of 3.5 percent, predictions of a recession are the exception rather than the rule,” Kazas concluded.

IBR findings are based on a survey of 5,000 business leaders in 35 economies.

Grant Thornton’s data falls in line with a PwC annual global CEO survey published last week, which found that 30 percent of the world’s business executives expect world growth to show signs of decline over the next 12 months.