Greece: Growth slows in annual terms in Q1, but economy continues to exhibit strong momentum
June 7, 2022
GDP growth moderated to 7.0% in the first quarter, from 8.1% in the fourth quarter of last year. Q1's reading marked the worst reading since Q1 2021, although this was chiefly the result of a more challenging base effect. On a seasonally-adjusted quarter-on-quarter basis, economic growth improved to 2.3% in Q1, compared to the previous quarter's 0.8% growth. Overall, the GDP results show that the economy was in good shape in the first quarter, reflecting the gradual lifting of Covid-19 restrictions.
The slowdown in annual growth was driven by weakening private consumption, fixed investment and exports. Private consumption growth waned to 11.6% in Q1 from a 11.9% expansion in Q4. Meanwhile, fixed investment growth fell to 12.7% in Q1, marking the worst reading since Q4 2020 (Q4 2021: +24.3%). That said, public consumption picked up to a 1.8% increase in Q1 (Q4 2021: +0.1%).
Exports of goods and services growth fell to 9.6% in Q1, marking the worst reading since Q1 2021 (Q4 2021: +24.1%). Imports of goods and services growth moderated to 17.5% in Q1 (Q4 2021: +33.3%).
Preliminary quarterly data for Q1 was markedly more positive than expected by our panelists. This was likely explained by their belief that the repercussions from the war in Ukraine and soaring food and commodity prices would have a larger effect on growth than was actually the case. Moving on to Q2 2022, economic momentum is likely to wane amid even higher inflation, although recovering tourism after the removal of all sanitary restrictions in early May should support activity somewhat.