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Greek economic mood improves slightly after debt deal
April 5, 2012 / 1:12 PM / 6 years ago

Greek economic mood improves slightly after debt deal

* Successful bond swap lifts mood somewhat
    * Economic sentiment remains at depressed levels
    * Consumers' propensity to save at historic low

    ATHENS, April 5 (Reuters) - Economic sentiment in Greece
improved slightly in March after the country pulled through a
debt cut plan that paved the way for a new EU/IMF bailout, the
country's leading economic institute said on Thursday.	
    The Foundation for Economic and Industrial
Research(IOBE)said its index -- based on consumer confidence
gauges and indexes for business expectations in industry,
construction, retail trade and services -- rose to 75.7 points
from 74.9 points in February.	
    "The successful implementation of the bond swap and
expectations that banks will be recapitalised have contributed
to a stabilisation (of the economic climate)," IOBE said.	
    The mood improved among industry, services and consumers
while it worsened further in construction and the retail trade.	
    The reading, however, remains at depressed levels, near its
historic low of 67.2 points in March 2009 and well below its
ten-year average of 96.3 points, according to IOBE figures.	
    "Uncertainties over the course of the economy persist," IOBE
said, citing firms' and households lingering doubts over the
country's capacity to implement the budget cuts and economic
reforms that are part of the bailout.	
    Greece's economy, which accounts for about 2.5 percent of 	
the euro zone, is seen staying in recession for a fifth straight	
year in 2012. It slumped by 6.9 percent in 2011, its worst
performance since the World War Two.	
    With unemployment rising and wages squeezed by higher taxes,
Greek consumers remain the most pessimistic in Europe, IOBE 	
said. Seventy-six percent of them expect their economic
situation to worsen further in the coming 12 months, slightly
down from 84 percent in the previous month.	
    Consumers' propensity to save dropped to a record low in
March, with 92 percent of respondents saying they don't expect
to have any spare cash to bolster their bank accounts over the
coming year.	
    The uptick in Greece's overall economic sentiment compared	
with a slight drop in the corresponding euro zone reading in
March, to 94.4 points in March from 94.5 in February.	
    Greece obtained in March its second EU/IMF bailout in two
years after convincing private sector bondholders to accept a
bond swap that slashed the value of their debt holdings.	
    The bailout, which allowed Greece to stay afloat, also set
aside funds to bolster the capital of the country's
cash-strapped banks.	
    IOBE provided the following data:	
                                           YR AVERAGE	
                     MARCH '12  FEB '12    2011  2010	
OVERALL SENTIMENT     75.7       74.9      77.6  79.3	
-industrial           75.7       71.6      76.9  75.8	
-services             55.2       53.4      61.7  63.6	
-retail trade         51.9       52.7      58.9  59.2	
-construction         33.2       43.4      34.2  47.4	
-consumer confidence -79.3      -83.5     -74.1 -63.4	
   * source: IOBE	
 (Reporting by Harry Papachristou; Editing by Rosalind Russell)

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