ECONOMY

Consumers predict a grim 2009

Greek consumers have become increasingly downbeat about the country’s economic prospects in the last few months on the widespread belief that the government has failed to take adequate action to protect the economy from the global crisis, according to research data. The monthly survey, commissioned by Kathimerini and Skai TV and Radio, found that consumer expectations about the course of the economy over the next 12 months fell 7.4 units in December from the previous month to 43.7 units, the second-lowest point in 2008. The index has been sliding since September, falling more than 15 units in three months, according to the data presented. It stood at 60.7 units in December 2007, while the average figure for 2008 came in at 55.8 units. Greece’s economy last year managed to outperform a number of its eurozone peers but has been slowing as the crisis bites. Consumer spending, which accounts for about two-thirds of the economy, has fallen as banks tightened lending in the wake of the credit crunch. The global economic slowdown is also harming two of the country’s most vital sectors – tourism and shipping. Along with Italy and Ireland, Greece ranks among the 12 largest economies in the European Union that have failed to deliver any tax cuts or provided additional spending programs to help stoke demand in the economy. On the contrary, the Finance Ministry introduced a series of new taxes in September, targeting equity investors and the self-employed, in a bid to boost slumping budget revenues. The survey also showed that consumers believe the crisis will hit the tourism, construction and retail and wholesale trade sectors especially hard. According to official government estimates, Greece’s economy is expected to expand by 2.7 percent this year. However, this figure is widely expected to be revised lower in the coming months.