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Worse recession data than expected

27 November 2015 / 18:11:18  GRReporter
748 reads

The Greek economy reported an even greater contraction in the third quarter of 2015 compared to initial estimates, as updated data show that during the period in question, Greece's GDP decreased by 1.1% (instead of by 0.4% as forecasted) compared to the same period last year.

As is clear from the interim data of the Greek Statistical Service, the 1.1% decline was due to the following:

- The contraction in investment by 27%

- Minimum consumption growth by 0.1%. Private consumption increased by 0.3% and state consumption by 0.4%.

- The substantial decline in exports by 11.4%

- The drastic reduction of imports by 19.9%

The substantial decline in exports and imports was rooted in the capital controls and banking holidays imposed in July, which limited the economic activity of the business.

In view of the new data, the Greek economy remained stable in the period from January to September (reporting a positive change of 0.06%). This fact is raising the question as to whether the zero recession for the entire year forecast by the Ministry of Finance could materialize. And this because it is believed that the GDP will report another contraction during the last quarter of the year.

The failure to achieve the recession related objectives can cause problems regarding the achievement of the fiscal targets for the year. In any case, it should be noted that the forecast for zero recession in 2015 has been agreed with creditor representatives.

Tags: RecessionForecastsUpdated dataHellenic Statistical Office
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