ATHENS Nov 14 Greece's economic slump deepened
in the third quarter, with output shrinking 7.2 percent on an
annual basis as the debt-racked country heads into its sixth
year of depression.
The contraction was deeper than the second quarter's 6.3
percent drop and follows the passage of a tough 2013 budget by
Prime Minister Antonis Samaras's government that is expected to
continue to smother growth for most of next year.
Since 2009, the Mediterranean state's economic decline -
which Samaras has dubbed Greece's "Great Depression" - has wiped
a fifth off economic output and put one in four Greeks out of
Analysts said the reading could point to an even grimmer
outlook because it was offset by better-than-expected returns
from the country's vital tourism sector.
"I think the recession will continue to deepen until the
first half of 2013, due to the implementation of all the cuts,"
said Xenophon Damalas, head of investment services at Marfin
Egnatia bank in Athens.
"If we hadn't had such a good picture in tourism this year,
the recession would have been deeper."
In its mid-term fiscal plan, the government expects the
economy to shrink 6.5 percent in all of 2012 and 4.5 percent
next year. It forecasts a slight recovery to begin at the end of
2013 and growth of 0.2 percent in 2014.
Greece's prolonged slide has undermined Athens' ability to
hit targets laid out in its bailout programme by undercutting
budget revenues and feeding popular anger over belt-tightening.
The country of 11 million is awaiting the release of more
than 30 billion euros in aid from its international lenders to
pay off debt and shore up its banking sector.
But a public clash on Tuesday between the lenders over how
Athens can bring its debts down to a sustainable level reignited
fears that its and Europe's broader debt troubles could flare up
Conditions could worsen under the 2013 budget, which
includes more than 9 billion euros in new tax hikes and spending
cuts, the latter of which will fall most heavily on pensioners
and public sector workers.