UPDATE 1-Greek retailers slump for fourth year in 2012

Thu Feb 28, 2013 6:41am EST

    By Harry Papachristou and Renee Maltezou

    ATHENS, Feb 28 (Reuters) - Greek retail sales plunged for a

fourth consecutive year in 2012, dropping by more than a tenth

and highlighting the pain  public sector austerity is inflicting

on household consumption.   

    Adjusted for inflation, sales dropped 12 percent, Greek

statistics agency ELSTAT said on Thursday. Overall, ordinary

consumers are buying a third less in stores than they were in

2009.

    That collapse in private consumption has been at the heart

of a six-year recession which is expected to have knocked around

24 percent off Greece's national output by the end of this year.

    Household spending accounts for about three quarters of the

economy, the biggest share in any euro area country, but is

bearing the brunt of mass unemployment, soaring taxes and

plunging wages which have reduced real disposable income of

almost a third since budget cuts began in 2010.

    Thousands of shops and smaller retail companies have shut

down and the collapse makes it harder for Athens to meet fiscal

targets under its 240 billion-euro bailout. Consumption taxes

dropped at an annual pace of 23 percent in January, compared

with a projected 6.3 percent drop for the full year.

    "The data is painting a rather grim picture about the state

of the domestic consumer," said EFG Eurobank economist Platon

Monokroussos.

    Economists expect falling consumption to remain a drag on

the economy this year, despite a slight improvement in consumer

confidence after Athens secured more bailout funds in December,

at the price of more austerity.

    But falling prices may ease some of the pain. Greece and its

foreign lenders expect consumer prices to fall by 0.8 percent in

2013, the first year of deflation in decades.

    Producer prices stopped rising in January for the first time

in more than three years, ELSTAT said separately on Thursday.

**********************************************************

    KEY FIGURES             DEC     NOV      OCT    SEPT     

    Retail sales* 

    by volume (y/y)              -8.5     -16.7**     -18.1   -11.8    

    Retail sales*

    by revenue (y/y)              -8.0     -16.5**     -17.1    -10.4    

    -----------------------------------------------------

    * Includes fuels and auto lubricants

    ** revised

    source: ELSTAT