Greek retail sales slump as austerity-hit consumers rein in spending

Greek retail sales fell 18.1pc year-on-year in October, recording the steepest drop in almost two years, as the deep recession and record-high unemployment took a toll on consumer spending.

Figures released on Monday by the statistics service ELSTAT showed the decline in retail sales by volume accelerated from a revised 11.8pc drop in the previous month, Reuters reported.

Austerity measures including higher taxes and cuts in public sector pay and pensions to shore up public finances have squeezed household budgets, with consumers also worried over unemployment, which hit a record 26pc in September.

Retail sales had registered a 19.4pc fall in December 2010.

"Unfortunately, 2012 is leaving the retail trade sector wounded, with small-to medium-sized firms facing conditions of a deep recession," the Confederation of Greek Commerce said in a statement.

With the economy shrinking at an annualised rate of nearly 7pc in the third quarter, official projections see the economic slump continuing for a sixth straight year in 2013.

The government forecasts national output will shrink by 4.5pc next year. The economy is expected to shrink by almost a quarter in 2008-2013, the country's worst postwar recession.