* Economic sentiment index rises to 20-month high
* Improved readings in services, retail trade
ATHENS, Dec 4 Greek consumers' pessimism about
the economy diminished in November after fears that the country
might have to quit the euro zone subsided, data showed on
The Foundation for Economic and Industrial Research (IOBE)
said its economic sentiment index rose to a 20-month high of
79.0 points in November from 75.8 in October, despite weaker
readings in industry and construction.
Greece's parliament approved early last month a 13.5 billion
euro ($17.3 billion) package of savings and labour reforms. This
was a key demand by the country's international lenders and
opened the way for the release of a long-delayed aid tranche,
which eased fears about Athens leaving the euro zone.
"The voting of the new measures by parliament helped to lift
some of the uncertainty, despite the significant impact the
austerity will have on a large part of the population," the IOBE
The measures included cuts in public sector pay, pensions
and welfare benefits to get the budget to a primary surplus next
year for the first time since 2002.
The IOBE bases its index on consumer confidence gauges and
business expectations in manufacturing, construction, retail and
"The passage of the measures helped ease concerns about the
country's course in the near future. A small return of deposits
in the banking system was noted, without this meaning that
overall pessimism declined significantly," the think tank said.
Greece's economy is projected to contract for a sixth
straight year in 2013, with national output seen declining by
4.5 percent according to the latest government forecasts. The
new savings are expected to prolong the economic slump which has
already driven the jobless rate to 25.4 percent.
With unemployment at this record level and wages squeezed
by higher taxes, Greek households remain the most pessimistic in
Europe - followed by consumers in Hungary and Portugal.
The IOBE said the percentage of consumers expecting
unemployment to worsen was steady at 90 percent, with 22 percent
of households tapping savings to get by.
The rise in Greece's overall economic sentiment in
November was in line with an improvement in the broader euro
zone reading in the same month to 85.7 from 84.3 in October.
The IOBE provided the following data:
NOV '12 OCT '12 SEPT '12 2011 2010
OVERALL SENTIMENT 79.0 75.8 76.1 77.6 79.3
-industrial 80.4 81.0 80.9 76.9 75.8
-services 52.5 52.2 59.9 61.7 63.6
-retail trade 56.2 51.1 58.4 58.9 59.2
-construction 51.1 58.3 44.4 34.2 47.4
-consumer confidence -74.1 -77.5 -75.6 -74.1 -63.4
(Reporting by George Georgiopoulos; editing by Stephen Nisbet)