The coast of Greece

Greece GDP Q1 2018

Greece: Economy grows at fastest pace since Q3 2007 on strong exports

According to provisional data released by the Hellenic Statistical Authority (EL.STAT), the Greek economy started 2018 on strong footing, growing at the strongest rate since the third quarter of 2007. GDP expanded 2.4% annually in Q1, up from 1.8% in Q4 2017. The print signals a positive start to 2018, with the economy supported by healthy external demand and a recovering labor market.

The robust acceleration was driven by the external sector. Export growth sped up to 9.5% year-on-year in Q1, from 5.7% in Q4. Growth in exports is being buoyed by a robust tourism industry, which has benefitted from reform measures to improve competitiveness, as well as economic conditions that are suppressing prices. In contrast, import growth contracted 2.7% in the first quarter (Q4: +5.0% year-on-year), which was likely caused by a fall in investment.

Meanwhile, the domestic economy’s performance was uneven in Q1. Fixed investment swung to the downside, contracting 9.9% in annual terms, contrasting Q4’s robust 25.2% expansion. The contraction was partly due to a strong base effect from a double-digit expansion in the same quarter a year prior. Private consumption, on the other hand, rebounded and grew at a one-year high of 1.3% in Q1 (Q4: -1.3% yoy). Government spending, meanwhile, eased to 0.2% growth (Q4: +2.1% yoy). All told, overall consumption expenditure recovered in the quarter.

On a quarter-on-quarter basis, the economy expanded 0.8% in Q1 in seasonally-adjusted terms, which was above Q4’s revised 0.2% increase (previously reported: +0.1% quarter-on-quarter) and the highest reading since Q2 2017. The print represented the fifth quarter of expansion in succession, suggesting a gradual recovery has taken hold.

Economic growth moving forward partially hinges on a smooth exit from the bailout program when it expires in August. Greece appears to be in a good position to do so, with favorable results from the banking sector stress tests and a better-than-expected primary surplus in Q1. Moreover, the economic recovery should gain momentum as investment returns to growth amid higher sentiment and improved financial conditions. Private consumption should also rise modestly as conditions in the labor market improve.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest