September 6, 2013 / 10:36 AM / 6 years ago

REFILE-Greek economy shrinks at smallest pace since 2010 in Q2, helped by rebound in tourism

* Economy contracts 3.8 pct, vs pvs 4.6 flash estimate
    * Tourism rebounding
    * Imports fall sharply as domestic demand still weak

    ATHENS, Sept 6 (Reuters) - Greece's economy shrank 3.8
percent in the second quarter, the smallest annual decline in
nearly three years and helped by a rebound in tourism, adding to
signs the long economic slump may be bottoming out.
    In another encouraging sign, exports rose for the first time
in five quarters, although the increase was slight, but imports
fell sharply, partly reflecting still very weak domestic demand.
    The second-quarter data, released by the statistics service
ELSTAT on Friday, marked the smallest decline in GDP since the
third quarter of 2010 and was better than an initial estimate in
August of a 4.6 percent contraction. It followed a 5.6 percent
slump in the first quarter, bringing the annual contraction in
the first half to 4.7 percent.
    "It was a big positive surprise," said National Bank
(NBG)economist Nikos Magginas. He said it was the smallest
quarter-on-quarter decline in GDP since end-2009 when the
country's debt crisis broke out, forcing Athens to seek a
foreign bailout.
     Greece does not publish official quarter-on-quarter changes
in gross domestic product.
    "We expect a similar picture in the third quarter. Following
this result, the target of a contraction of 4.2 percent for the
full year is perfectly feasible and could be even lower," said
    Tourism, which accounts for about a fifth of Greek GDP, is
rebounding and tourism receipts, which fell about 5 percent last
year, jumped 15.5 percent in the first five months of this year.
    Officials expect revenues to rise by 10 percent in 2013 to
11 billion euros on a record 17 million visitors this year, a
million more than last year.
    Imports plunged 11.8 percent in the second quarter from a
year earlier, while exports rose by a very modest 0.9 percent.
    The country is in a sixth consecutive year of an
austerity-fuelled recession that has crippled private
consumption, the economy's main engine. Falling wages and
unemployment of above 27 percent, a record high, are also
depressing demand and retail sales fell 7.8 percent year on year
in June.
    Greece's lenders, the European Union and International
Monetary Fund, project the economy will shrink 4.2 percent this
year but see marginal growth of 0.6 percent in 2014.
    The economy has slumped 23 percent in real terms since 2008,
hurting tax revenues and making it hard for Athens to meet the
targets of two consecutive foreign bailouts worth over 200
billion euros. 
    The IMF and Greece estimate that Athens will need 10-11
billion euros in new financing in 2014- 2015 above what the euro
zone and the IMF have agreed to so far.
    The euro zone is likely to decide on a third bailout for
Greece in November, after international inspectors finish an
assessment of Greece's struggles to carry out painful reforms.
    KEY FIGURES      Q2 2013  Q1 2013   Q4 2012    Q3 2012
    GDP (y/y, pct)    -3.8     -5.6      -5.7       -6.7       
    * revised
    source: ELSTAT
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