Greece: Economy remains in the doldrums
September 7, 2012
According to data released by the Hellenic Statistical Authority (EL.STAT) on 7 September, GDP contracted 6.3% in the second quarter over the same period last year (Q1: -6.5% year-on-year). The print marks a further deterioration over the initial flash estimate of a 6.2% decline and represents, in fact, the 14th drop in economic activity seen in the last 15 quarters. The softer contraction seen in Q2 was mainly caused by an improvement in domestic demand (Q1: -10.9% yoy; Q2: -8.5% yoy), whereas the external sector deteriorated. Private consumption declined 8.0% in the second quarter (Q1: -8.7% yoy), while public spending fell into the red due to government efforts to trim the rampant fiscal deficit (Q1: +0.2% yoy; Q2: -3.7% yoy). Meanwhile fixed investment fell 19.4%, an improvement over the 21.3% drop recorded in Q1. Furthermore, total investment improved at an even sharper pace due to a slower destocking process. The external sector deteriorated, as exports of goods and services fell 4.1%, contrasting the 1.5% rise seen in the previous three-month period. On the other hand, imports declined 12.3%, an improvement over the 16.9% drop observed in Q1. As a result, the external sector's net contribution to overall economic growth fell from 5.7 percentage points in the first quarter to 2.7 percentage points in the second. EL.STAT has not provided seasonally adjusted figures since Q1 2011 due to methodological problems.