Athens: Greek economic sentiment slumped in May as the government agreed to another round of budget austerity in return for 110 billion euros (Dh495 billion) in loans from the European Union and International Monetary Fund.
An index that measures short-term economic trends dropped to 61.9 points from 69.1 in April, the Athens-based Foundation for Economic and Industrial Research said in a statement Friday. Consumer confidence declined to minus 67 points from minus 61.
"The extensive insecurity of Greek consumers about the reduction of their purchasing power and increasing unemployment deepened in May with the gradual announcement of the agreement with the IMF," the foundation said.
"Consumers are concerned about the coming changes and the need to adjust to a new reality which will likely differ markedly from what's been considered usual in past years."
Lawmakers last month approved measures including wage and pension cuts and increases in sales, fuel and alcohol taxes. Greece agreed to the package in order to access the emergency funds as it tries to narrow the budget deficit to 8.1 per cent of economic output this year from 13.6 per cent in 2009.
Seventy-nine per cent of households, compared with 69 per cent in April, expected a worsening of the economic situation over the next 12 months, with the index falling for a seventh month to minus 62 points, the foundation said. The number of households planning to save more over the period rose to 17 per cent from 13 per cent.
