Citi sees GDP contraction continuing to H2 of next year

The Greek economy shrank 3.4 percent in 2013 and will post a further contraction amounting to 1.9 percent in 2014, US bank Citi estimated ahead of Friday’s issue of the final 2013 gross domestic product data by the Hellenic Statistical Authority (ELSTAT).

In contrast to official estimates for an economic rebound this year, Citi does not expect the economy to start expanding again before the second half of 2015.

Nevertheless the bank’s officials in Greece, who drafted the report, concede that the prospects of the country’s economy have improved, as the latest data on the purchasing managers index (PMI), car sales and the budget’s primary surplus have shown.

The primary surplus lays the groundwork for a new round of negotiations aimed at the lightening the Greek state debt, whose servicing continues to be unsustainable, according to Angelos Kallipolitis, head of research at Citi’s Wealth Management Department.