ECONOMY

Economic mood near record low in November

The economic mood in Greece remained close to its most pessimistic ever in November, despite a small uptick in the economic climate index, a survey showed on Monday as the government debates next year’s budget aiming at a primary surplus.

The Foundation for Economic and Industrial Research (IOBE)said its index — based on consumer confidence gauges and sub-indexes for business expectations in industry, construction, retail trade and services — edged higher to 68.6 from 67.5 points in October. The worst reading was in March 2009.

But apart from a small improvement in consumer confidence, readings on all other sectors of the economy worsened.

“The seeming stabilisation of the political landscape with the formation of a new unity government may lead to some improvement. But with the international environment worsening, it will take convincing policies to remove part of the uncertainties,» IOBE said.

With unemployment rising and wages squeezed by higher taxes, Greek consumers remain markedly more pessimistic than other Europeans, it said.

All sectors of the economy fared worse than in October, with 82 percent of Greeks expecting their economic situation to worsen further in the coming 12 months.

Greece has taken additional austerity measures to make up for slippage on its budget targets set by its foreign lenders to secure continued funding and avoid default.

Its economy, which accounts for about 2.5 percent of the eurozone, is in the fourth straight year of recession, projected to slump by more than 5.5 percent this year and contract further in 2012.

Unemployment climbed to a record high of 18.4 percent in August and may rise further.

The uptick in Greece’s overall economic sentiment compares with a slight drop in IOBE’s euro zone reading in November. The 17-nation bloc’s economic sentiment index slipped to 93.7 points from 94.8 in October.