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Political uncertainty sours Greece's economic mood ahead of election


Anti-austerity protests in Greece last year

Anti-austerity protests in Greece last year

Anti-austerity protests in Greece last year

Greeks turned more pessimistic about their economic prospects in December, with a core gauge of business sentiment falling to its lowest level since April 2014 ahead of a snap election on Jan. 25.

The radical leftist Syriza party is leading opinion polls, triggering fears of a standoff with EU/IMF lenders that could result in Greece leaving the euro zone. Syriza has pledged to cancel austerity policies imposed as part of Greece's 240 billion euro bailout, and try to negotiate debt relief.

The Foundation for Economic and Industrial Research (IOBE)said its overall sentiment index for the Greek economy fell to 98.9 points in December from 102.7 in November.

The index is based on consumer confidence gauges and readings of the business outlook in sectors including construction, manufacturing industry, retail trade and services.

The index had shown an almost steady improvement since the start of 2014, registering its best readings for six years as the economy began to emerge from a deep recession.

It hit a high of 104.1 points in June 2014 after averaging out at 90.8 in 2013 and at 80.3 in 2012.

IOBE noted a weakening of expectations in all sectors of the economy in December except construction, with consumer confidence also worsening markedly.

"A period of improving expectations was halted as the political uncertainty that emerged in December in view of national elections affected businesses and consumers," IOBE said.

Based on the survey, Greek households remained the most pessimistic in Europe, with 63 percent expecting their financial situation to worsen in the next 12 months.