Greece: Economy decays further, confirming recessionary conditions
February 15, 2011
In the fourth quarter, GDP contracted a seasonally adjusted 1.4% over the previous quarter, according to the first estimate released by the Hellenic Statistical Authority (EL.STAT) on 15 February. The reading confirmed the notion that the country remains mired in recession and surprised the market on the downside, as analysts had expected a 1.2% contraction. Despite the dismal result, the figure represented a slight improvement compared to the revised 1.7% drop (previously reported: -1.3% quarter-on-quarter) recorded in the third quarter. On an annual basis, the economy plunged 6.6%, which represented the worst result on record. According to EL.STAT, the deterioration was driven by plunging consumption following the government's severe austerity measures. On the other hand, the net contribution from the external sector to overall economic growth improved somewhat in the fourth quarter, partially mitigating the negative effect of weak domestic demand. Revised and more complete data will be published on 11 March. Based on quarterly figures, the economy was unable to recover from the 2.0% contraction tallied in 2009, as GDP fell an estimated 4.5% in 2010. The Central Bank expects the economy to contract at least 3.0% this year.