Greece: GDP shrinks more than expected in the first quarter
June 12, 2013
According to data released by the Hellenic Statistical Authority (EL.STAT) on 7 June, the economy contracted 5.6% in the first quarter over the same period last year, which follows on the 5.7% decline observed in the last quarter of 2012. The reading was below market expectations of a more moderate 5.3% contraction and represents the 19th consecutive quarter of declining economic activity.
Domestic demand remains depressed, as the country continues to implement the harsh set of austerity measures agreed with the EC-ECB-IMF Troika. Private consumption fell 8.7% in the first quarter (Q4 2012: -9.6% year-on-year), while government spending decreased 7.0% (Q4: -5.8% yoy). Meanwhile, fixed investment plummeted 11.4%, down from the 10.3% contraction recorded in the fourth quarter. That said, total investment expanded for the second quarter in a row and added 5.1% (Q4: +4.9% yoy), underpinned by a strong restocking process.
The external sector improved somewhat, as exports of goods and services fell 2.6% in Q1 (Q4: -4.8% yoy), while imports declined 7.8% (Q4: -8.1% yoy). As a result, the external sector's net contribution to overall economic growth rose from 1.4 percentage points in the fourth quarter to 1.8 percentage points in the first.
EL.STAT has not provided seasonally adjusted figures since Q1 2011 due to methodological problems.
FocusEconomics Consensus Forecast panellists see the economy contracting 4.7% in 2013, which is unchanged from last month's forecast. For 2014, the panel expects a milder contraction of 0.4%.