Bloomberg News

Greek Economic Sentiment Worsened in January on Loan Uncertainty

February 07, 2012

Feb. 6 (Bloomberg) -- Greek economic sentiment worsened in January as uncertainty shrouded the country’s efforts to secure a 130 billion-euro ($170 billion) new financing package from the European Union and the International Monetary Fund.

An index measuring short-term economic trends dropped to 74.9 from 75.7 in December, the Athens-based Foundation for Economic & Industrial Research, known as IOBE, said in an e- mailed report today. Consumer confidence improved to minus 80.1 from minus 81.9 in December, the foundation said.

In October, the economic sentiment index sank to its lowest level in more than two years as it became clear that an initial second financing package agreed on in July would need to be renegotiated. Prime Minister Lucas Papademos, a former vice president of the European Central Bank, became Greece’s prime minister in November in an interim administration charged with implementing a redesigned package, which was agreed to at an Oct. 26 EU summit.

“Uncertainty about the overall economic direction of the country and its financing with the new loan package, together with its conditions, remains intense,” IOBE said in the report. “That doesn’t allow an optimistic view, although there are isolated businesses that are resisting and are trying, under tight credit conditions, to maintain their momentum.”

Sentiment in the service sector extended its record low, dropping to 54.2 from 55.2. There were slight improvements in sentiment in the industrial and retail sectors.

--Editors: Jeffrey Donovan, Eddie Buckle

To contact the reporter on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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