Greek retail sales posted their deepest slump in almost a year in August

Greek retail sales posted their deepest slump in almost a year in August, data showed on Friday, adding to investor worries about recession and budget slippages in the debt-laden country. Greek bonds and banking stocks have taken a beating this week on resurgent doubts over the country's ability to avoid bankruptcy. The government has exhausted the scope for further tax increases and faces an upward revision of its 2009 budget deficit, underlining the scale of the economies it needs to make, as well as challenging local elections next month.

Retail sales dropped an annual 11.8 percent in August after a 9.1 percent decline in July, as austerity-pinched households curbed consumption, according to the statistics service ELSTAT. Excluding fuels and lubricants, whose prices are volatile, retail sales by volume dropped 12 percent, their steepest fall since June 2009. "Households are under intense pressure, stemming from higher taxes and significantly lower public spending. Moreover, the labour market is in dire straits, while credit conditions remain tight," said Diego Iscaro, an economist with IHS Global Insight.

News source: Balkans.com link: article