Greece: GDP contracts at slower pace in Q2
September 6, 2013
According to data released by the Hellenic Statistical Authority (EL.STAT) on 6 September, the economy contracted 3.8% in the second quarter over the same period last year, which follows on the 5.6% decline observed in Q1. The reading - which came in above market expectations of a 4.6% drop - marked the softest contraction since the second quarter of 2010. That said, the Q2 data represented the 20th consecutive quarter of declining economic activity.
The Q2 improvement was led by strengthening in the external sector, while domestic demand remained depressed. Private consumption fell 6.3% in the second quarter (Q1: -8.7% year-on-year); government spending also dropped 6.3% (Q1: -8.8% yoy). Meanwhile, fixed investment fell 11.0%, which was down from the 11.4% contraction recorded in the first quarter. Nevertheless, total investment contracted 15.2% over the same quarter last year - the first drop after two quarters of expansion - on the back of a negative shift in inventories.
Exports of goods and services rose 0.9% in Q2 (Q1: -2.5% yoy), returning to positive growth after four consecutive negative readings. Meanwhile, imports declined 11.8% (Q1: -7.7% yoy). As a result, the external sector's net contribution to overall economic growth rose from 1.7 percentage points in the first quarter to 3.6 percentage points in the second.
EL.STAT has not provided seasonally adjusted figures since Q1 2011 due to methodological issues.
FocusEconomics Consensus Forecast panelists 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%.
Author: Armando Ciccarelli, Head of Data Solutions