Greece: Economy remains mired in recession
June 9, 2011
GDP contracted a revised 5.5% in the first quarter over the same period last year, down from the initial flash estimate of a 4.8% drop, but above the 7.4% contraction tallied in the fourth quarter. Nevertheless, the first quarter represented the second deepest quarterly decline since the economy sunk into recession in the fourth quarter of 2008. Final consumption expenditures dropped 6.9% (Q4: -9.7% year-on-year), with private consumption plunging 7.8% (Q4: -8.0% yoy) and government spending falling 3.4% (Q4: -14.9% yoy). In addition, fixed investment contracted 19.2% (Q4: -21.6% yoy). The dismal performance of the domestic economy was contrasted by a favourable development in the external sector. While exports of goods and services declined 2.0% (Q4: +12.2% yoy), imports plummeted a much stronger 15.5% (Q4: -1.5% yoy), which saw the net contribution from the external sector to overall economic growth jump from 2.8 percentage points in Q4 to 4.6 percentage points in Q1. A quarter-on-quarter analysis, however, does not corroborate the contraction suggested by the annual figures. According to seasonally adjusted data, GDP added 0.2% over the previous quarter (Q4: -2.8% quarter-on-quarter), which represents the first positive reading since the fourth quarter 2009.However, the seasonally adjusted results should be viewed with caution as the data are based on a new method for seasonal adjustment developed by the Hellenic Statistical Authority (EL.STAT) in consultation with Eurostat.