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Survey: Greece still gloomiest after one year of bailout

Economic sentiment in Greece deteriorated for a second straight month in April, according to a survey showing the country’s consumers remain the most pessimistic in Europe a year after its EU/IMF bailout. Consumer confidence worsened after a three-month improvement as most Greeks cast doubt on recovery prospects and the survey also showed weaker sentiment in industry and retail trade firms.

The Foundation for Economic and Industrial Research (IOBE) said its economic climate index, based on business expectations sub-indices covering industry, construction, retail trade, services and consumer confidence, fell to 74.2 from 78.4 points in March.

“The economic sentiment index is at last year’s levels, implying that one year after the (country’s) recourse to the European support mechanism, consumer and business expectations have not improved,” IOBE said.

“The percentage of Greek consumers who think their economic situation will worsen, slightly or markedly, rose to 77 from 69 percent,” IOBE said, adding that 93 percent expected unemployment to rise in the coming 12 months.

Consumers in Romania, which took an IMF-led bailout in 2009, were the second gloomiest in Europe, followed by Portugal , whose caretaker prime minister has just negotiated a rescue deal with the European Union and International Monetary Fund .

Greece’s economy , about 2.5 percent of the euro zone, is going through its worst recession since 1974 and is projected to shrink 3 percent this year as a result of belt-tightening to cut deficits and continue to receive EU/IMF emergency funding.

Prohibitive borrowing rates forced Athens to seek a 110 billion euro ($160 billion) bailout from the IMF and its euro zone peers in May last year when the economy slumped 4.5 percent.

Greece’s jobless rate climbed to a record high of 15.1 percent in January, with younger age groups hit hardest. In the construction sector, a main economic driver, the reading rose mildly after a drop to a historic low in March.

IOBE said it was the result of improved expectations for private building activity although the outlook for public works remained downbeat after the government chopped its public investments budget as part of a drive to cut spending.

The downtick in Greece’s overall economic sentiment compares with a slight drop in the euro zone’s reading. The 17-nation bloc’s economic sentiment index fell to 106.2 points in April from 107.3 in March.

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