Greece: Economy contracts less than previously estimated
March 11, 2014
In the last quarter of 2013, GDP contracted 2.3% over the same period of the previous year according to more detailed data released by the Hellenic Statistical Authority (EL.STAT) on 11 March. The contraction was less severe than both the 2.6% decrease reported in the preliminary estimate and the revised 3.2% contraction recorded in the previous quarter (previously estimated: -3.1% year-on-year). Q4's figure marks the softest contraction since Q1 2010. In the full year 2013, the economy shrank 3.9%, the softest pace of contraction in four years (2012: -7.0%). On the domestic side of the economy, private consumption improved from a 7.8% fall in the third quarter to a 0.2% decrease in the fourth quarter. Government consumption fell 2.6% in Q4, which contrasted the 1.7% increase observed in the previous quarter. In addition, total investment fell 15.7% in Q4 (Q3: +9.1% yoy), with fixed investment decreasing 15.3% (Q3: -12.9% yoy). Exports of goods and services decelerated from a 5.2% increase in Q3 to a 0.5% rise in Q4, while imports swung from a 2.7% increase in Q3 to a 5.6% fall in Q4. As a result, the external sector's net contribution to overall economic growth rose from plus 0.9 percentage points in the third quarter to plus 1.8 percentage points in the fourth quarter. EL.STAT has not provided seasonally-adjusted figures since Q1 2011 due to methodological issues. The government expects the economy to expand 0.6% in 2014, which would mark the first expansion in 7 years. FocusEconomics Consensus Forecast panelists are less optimistic than the government and see the economy showing flat growth in 2014, which is up 0.1 percentage points over last month's forecast. For 2015, the panel expects growth of 1.5%.
Author: Dirina Mançellari, Senior Economist