The economic climate weakened marginally in June, with the relevant index standing at 110.6 points from 111.0 points in May, according to the results of the Foundation for Economic & Industrial Research (IOBE) economic sentiment surveys. The decline comes from two business sectors: industry and retail trade, while the consumer confidence index strengthened slightly, as did the services and construction sectors.

A number of factors are influencing the sentiment. The results of the European elections have caused an increase in political and economic uncertainty in Europe, which seems likely to persist in the period ahead. In our country, they have affected the political environment, leading to a government reshuffle, albeit on a relatively limited scale. Any effects on economic policy are expected to be seen in the autumn.

In the meantime, the summer season is already generating increased incomes due to the strong performance of tourism and expectations that the overall impact on incomes and employment in various sectors will be strongly positive. Inflation is on a gradual downward path. However, the issue of inflation remains a concern for citizens, as 58% of households expect prices to rise again at the same or faster pace, and 61% say they are "just getting by.".

The rate of income growth as well as the cost of goods and services will have an impact on the economy in the coming months.

In more detail:

• In manufacturing, the negative balance of estimates for orders and demand eased significantly, estimates for inventories strengthened slightly, and positive forecasts for production in the coming months weakened.
• In construction, negative forecasts for business activity schedules narrowed significantly, while positive employment forecasts strengthened markedly.
• In Retail Trade, estimates for current sales weakened slightly, with the level of inventories easing and forecasts for near-term sales growth declining sharply.
• In services, positive assessments of the current state of business escalate markedly, while estimates of current demand weaken marginally, with forecasts of near-term demand developments strengthening mildly.
• In Consumer Confidence, households' negative forecasts for the country's economic situation strengthened, while their forecasts for their own economic situation remained optimistic. At the same time, forecasts for major purchases improved markedly, while the intention to save weakened.