UPDATE 1-Greek recession slightly deeper than expected

Tue Mar 11, 2014 9:26am EDT

Related Topics

* Greek GDP shrank almost 24 percent in 2008-13 - revised
data
    * Household consumption slumped 26 pct, investment by 64 pct
    * Greek economy seems to be bottoming out, sentiment
improving


    By Harry Papachristou
    ATHENS, March 11 (Reuters) - Greece's economy has shrunk by
almost 24 percent over the past six years in the deepest and
most protracted peacetime recession in its history, according to
revised gross domestic product data released on Tuesday.
    Greek GDP shrank 3.9 percent in 2013, from an estimate of
3.7 percent in February, statistics service ELSTAT said.
    Exacerbated by the austerity policies imposed by
international lenders who bailed Greece out, the recession's
main driver since the financial crisis hit in 2008 has been a
26-percent slump of household consumption, as record
unemployment and wage cuts slashed family disposable incomes.
    Greece also saw investment collapse by almost two-thirds
over the same period as home-building activity virtually ground
to a halt, Tuesday's figures showed.
    With households and companies cutting spending and
investment, imports of consumer goods and equipment sank last
year to almost half their level in 2008.
    Tourism, one of the country's biggest foreign-currency
earners, soared last year but did relatively little to lift the
economy. 
    Exports of goods and services rose by 1.8 percent in 2013
but were still 15 percent below pre-crisis levels, as frail
European economies failed to absorb more Greek goods, mostly
agricultural products and raw materials.
    The recession, however, does seems to be bottoming out as
confidence in the economy slowly returns after Athens has 
avoided chaotic default and an exit from the euro zone.
    Most international organisations and the government expect
the economy to modestly recover this year, rising 0.6 percent on
the back of a rebound in investment and exports.
    Greece's economic sentiment index rose in February to its
highest level in more than five years, the Athens Stock Exchange
 is at a 2.5-year high and 10-year government bond yields
 have dropped below 7 percent, their lowest level
since the country's 237-billion euro bailout started in 2010. 
    Optimism is also fuelled by signs that the government is
improving its fiscal management. The central government reported
on Tuesday a primary surplus of 2.1 billion euros ($2.91
billion) in the first two months of the year, beating an interim
target by more than 1 billion euros. 
    Greek GDP is revised frequently and ELSTAT does not provide
seasonally adjusted quarter-on-quarter data, which most
countries use to measure their economic performance.
    Methodological changes also resulted into a slightly lower 
reading for 2012, with the new figures showing the economy
contracting by 7 percent from a previous estimate of 6.4
percent.
    
  KEY FIGURES     Q4 2013     Q3 2013     Q2 2013     Q1 2013
 GDP (y/y, pct)    -2.3*       -3.2*       -4.0*       -6.0*
    * revised
    source: ELSTAT
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