Greece's battered economy remained in deflation territory for the fifth consecutive month in July, as consumer prices fell yet again due to a huge drop in the prices of clothing and footwear.

Consumer prices fell 0.7% year-on-year in July and plummeted below a predicted 0.4% drop. The EU-harmonised deflation dropped to 0.5% from 0.3% in June, according to data from Greece's statistics office ELSTAT.

By comparison, inflation in the 17-nation eurozone remained stable at 1.6% in July.

In Greece, the prices of clothing and footwear dropped 13.6% in July. Household equipment prices fell 2.4%, while those of food and non-alcoholic beverages fell 1.2%.

Consumer prices in recession-hit Greece fell 0.4% in June and May, 0.6% in April and 0.2% in March. Greece entered deflation for the first time in 45 years in April because of a decline in the price of services.

Greece has been hit harder than any other eurozone economy by the sovereign debt crisis in 2010, and still teeters on the brink of collapse.

The country is in its sixth year of recession and unemployment hovers at a record rate of 27%. Over 60% of the country's youth are jobless.

Analysts say Greece cold lose another 195,000 private sector jobs, as the Government's strict austerity measures cause thousands of businesses to close.

According to the Institute of Small Enterprises of the Hellenic Confederation of Professionals, Craftsmen and Merchants (IME/GSEVEE) report, the number of businesses collapsing amid the ongoing sovereign debt crisis will outstrip the number of those opening up. The group's general-secretary Nikos Skorinis expects 195,000 jobs will be lost by the end of 2013.

Earlier, Athens decided in a parliamentary vote to axe or transfer 25,000 public sector workers amid mass protests against austerity measures.

The Government had initially agreed, as part of its rescue package terms, to cut 15,000 public sector jobs by the end of 2014. Greece's €240bn rescue deal expires at the end of 2014.