Greece, Russia seen dragging down projected Christmas spending in Europe

Families across Europe look set to spend slightly less on average this Christmas, with austerity-hit Greece and Russia showing the steepest declines, a survey showed on Friday.

French, British, German and Spanish consumers are among those expected to spend more, it said. The overall decline will also be at a much slower pace than last year, signalling some improvement in sentiment.

The survey by market research group Deloitte showed that the average Christmas budget across Europe would ease 0.28 percent this year to about 513 euros (361 pounds) per family.

This would be a limited decline when compared with a 3 percent fall last year, as consumers' perceptions about the European economy were generally improving.

This year's decline in Europe was led by Greece, where spending will drop 8.63 percent to an average 402 euros, Russia where families will spend 6.96 percent less to 217 euros, and Portugal where spending will fall 5.55 percent to 315 euros.

All three countries have seen their economies battered in recent years. Greece is in its third international bailout, Russia has been hit by sanctions over its dealings with Ukraine, and Portugal is beset by weak growth and austerity.

Christmas spending will also decline in Italy – down 3.08 percent – but is set to rise 0.2 percent in economically recovering Spain, Deloitte said.

Among Europe's biggest Christmas shoppers, families will spend 884 euros on average in Britain, up 0.68 percent from last year, 617 euros in Denmark, up 5.21 percent, 577 euros in France, up 0.23 percent, and 423 euros, up 0.87 percent in Germany, the poll showed.

French more optimistic

One of the biggest turnarounds may be in France. The anticipated French spend compares with a decline of 4.5 percent last year.

"French consumers are becoming more optimistic. Driven by improving morale, the French plan to spend a little more this year for Christmas," Stephane Rimbeuf, Deloitte Associate in charge of Consumer Business, told Reuters.

Some 43 percent of those polled in France still feared their purchasing power would further deteriorate, but that was down from 50 percent last year.

Earlier this month, the European Commission forecast that the euro zone was expected to grow 1.6 percent in 2015, with modest acceleration of gross domestic product (GDP) to 1.8 percent in 2016 and 1.9 percent in 2017.

Although divergences remain among the 19 countries sharing the euro, economic growth was now widespread with only Greece still in recession.

Deloitte surveyed 14,065 people across 14 countries around Europe as well as in South Africa, which is due to see a 9.9 percent decline from last year.

[Reuters]