* Annual sales fall 6.8 pct from 2011
* VAT, unemployment hit consumption (Adds details)
MADRID, Jan 29 (Reuters) - Spanish retail sales fell for the 30th month in a row in December, data showed on Tuesday, with a hike in sales tax deterring shoppers already suffering from recession and 26 percent unemployment.
December sales fell by 10.7 percent year-on-year on a calendar-adjusted basis, the National Statistics Institute said, sharper than November's 7.8 percent fall.
The government hiked sales tax from September as a way of bringing more revenue into depleted coffers in order to hit strict Europe-imposed deficit targets.
Retail sales in 2012 were down 6.8 percent on 2011, the data showed.
"The economy slowed down a lot in the last quarter," said Nicolas Lopez, head of analysis at M&G Valores. "The rise in unemployment also reduced income available for families."
Unemployment hit 26 percent for the quarter, the highest level since records were started in the 1970s. (Reporting By Sarah Morris; Editing by Sonya Dowsett/Editing by Jeremy Gaunt.)