Greek economic mood slips in Jan; tough 2013 in store

Wed Feb 6, 2013 9:19am EST

ATHENS, Feb 6 (Reuters) - Greeks became more pessimistic in
January about their economic prospects, a survey showed on
Wednesday, with a core sentiment reading holding close to a
two-year high but well down on pre-crisis years. 
    The Foundation for Economic and Industrial Research
(IOBE)said its sentiment index for an economy in its sixth
straight year of recession fell to 85.8 points from an upwardly
revised 86.9 points in December.
    The index is based on consumer confidence gauges and
readings on the business outlook in four sectors; construction,
retail and services - for which readings improved last month -
and manufacturing.
    In 2008, before the economy lurched into crisis, its average
reading was 98.6.
    "The uncertainty noted in previous months has clearly abated
as the continued funding of the economy by Greece's (EU/IMF)
partners has built credibility, which is positively viewed by
survey participants," IOBE said in its monthly survey.
    But it said most survey participants expect 2013 will be
especially difficult as the impact of the country's fiscal
adjustment effort will affect the entire economy, particularly
during the first half.
    Based on the survey, Greek households remained the most
pessimistic in Europe as increased taxes and cuts in pay and
pensions weigh more heavily.
    Greece's international lenders - its euro zone partners and
the International Monetary Fund - agreed in December to disburse
nearly 50 billion euros in bailout aid to keep the debt-burdened
country afloat.
    The aid was unlocked after Athens committed to a 13.5
billion euro package of savings and labour reforms to shore up
public finances and improve its economy's competitiveness.
    IOBE has said it expects the economy to remain in recession
in 2013, with national output (GDP) seen contracting by 4.6
percent, weighing on unemployment which has already climbed to
nearly 27 percent. 
    Based on the survey, Greek households remain the most
pessimistic in Europe, followed by consumers in Portugal and
Cyprus, as increased taxes and cuts in pay and pensions become
increasingly felt.
    The IOBE provided the following data:  
***************************************************************
                                                    YR AVERAGE
                      JAN '13   DEC '12   NOV '12   2012  2011
OVERALL SENTIMENT      85.8     86.9      82.1      80.0  80.6
-industrial            83.7     83.6      80.4      77.2  76.9
-services              58.9     55.8      52.5      54.8  61.7
-retail trade          62.6     59.4      56.2      57.1  58.9
-construction          38.5     35.6      51.1      43.2  34.2
-consumer confidence  -71.9    -72.1     -74.1     -74.8 -74.1
--------------------------------------------------------------
    source: IOBE

 (Reporting by George Georgiopoulos; Editing by John
Stonestreet)
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