ECONOMY

Confidence hits low, inflation picks up

Consumer confidence fell to a record low in December, according to a report released yesterday, amid concern over rising unemployment and the economic outlook for 2011. Consumer confidence dropped almost six points to minus 75.4 points, the lowest since the data series began in May 2008, the Foundation for Economic & Industrial Research (IOBE) said. An index measuring short-term economic trends slipped to 65.6 from 67 in November, it added. Greek households «for the 10th month in a row remain the most pessimistic Europeans,» IOBE wrote. «The impact of the crisis, the process of adjustment to the new economic realities it brings and mainly the fear of spreading unemployment» are darkening Greeks’ economic outlook. Meanwhile, data released yesterday showed that rising world oil prices nudged Greece’s annual consumer price inflation higher to a 5.2 percent rate in December, more than twice the average for the eurozone, and up from 4.9 percent in November. In monthly terms, consumer prices were also higher, up 0.4 percent in December, compared with a 0.2 percent increase a month earlier, as rising fuel prices hit transportation costs and jacked up the price of home heating oil. The Hellenic Statistical Authority (ELSTAT) said yesterday that the largest increase in the year-on-year rate came from a sharp 15.1 percent jump in transportation costs, along with a 7.5 percent increase in housing prices. Combined, those two categories accounted for half of the overall December inflation rate. Prices for alcohol and tobacco also jumped 18.9 percent, reflecting increased taxes on alcohol and cigarettes which the government has imposed as part of its belt-tightening measures. Economists expect the inflation rate to fall next year as the Greek economy experiences a third year of recession, with consumer demand sputtering on the back of the recent austerity measures.