Greece: Economy remains deeply mired in recession
March 9, 2012
According to provisional data released by the Hellenic Statistical Authority (EL.STAT) on 9 March, GDP dropped 7.5% in the fourth quarter over the same period the year before. The print represents a further deterioration over the initial flash estimate of a 7.0% contraction and also exceeded the 5.0% drop recorded in the third quarter. The deterioration was mainly due to worsening domestic demand (Q3: -7.2% year-on-year; Q4: -9.6% yoy), amid the draconian set of austerity measures agreed under the two rescue packages. Total consumption was dragged down by falling private consumption (Q3: -5.2% yoy; Q4: -7.0% yoy) and plummeting government spending (Q3: -3.4% yoy; Q4: -10.5% yoy). On the other hand, total investment improved marginally (Q3: -20.7% yoy; Q4: -17.5% yoy) due to higher stockpiling, although fixed investment deteriorated further and fell 22.2% (Q3: -16.4% yoy). The external sector improved, as imports declined at a sharper pace than exports. Exports of goods and services contracted 6.1% (Q3: +4.5% yoy), while imports plummeted 14.2% (Q3: -3.8% yoy). As a result, the external sector's net contribution to overall economic growth increased from 2.3 percentage points in the third quarter to 3.1 percentage points in the fourth. EL.STAT has not provided seasonally adjusted figures since Q1 2011 due to methodological problems. The government sees the economy shrinking 2.8% in 2012.