BUSINESS

Contraction in 2013 revised to 3.85 pct

National Bank report expects economy to recover by 0.7 percent this year, ending a six-year recession By Sotiris Nikas

Greece’s economic contraction in 2013 has been revised to 3.85 percent of gross domestic product from a previous estimate for 3.7 percent, according to figures announced on Tuesday by the Hellenic Statistical Authority (ELSTAT), while National Bank estimates in a report that the country’s economy will rebound 0.7 percent this year.

Provisional GDP data for 2013 showed the contraction in the last quarter to have come to 2.3 percent on a yearly basis, against a previous estimate of 2.6 percent, but the revisions for last year’s other three quarters were upward: 6 percent in Q1 (against 5.5 percent), 4 percent in Q2 (from 3.7 percent) and 3.2 percent in Q3 (compared with an estimate for 3 percent).

Even so, the 3.85 percent rate is smaller than the original target for a 4 percent GDP contraction.

Notably ELSTAT has found that household consumption declined by just 0.2 percent year-on-year in the October-December period, while state spending contracted by 2.6 percent in the same quarter. Investments dropped 15.3 percent, imports fell 5.6 percent and exports shrank by just 0.5 percent.

The report by National Bank’s Financial Analysis Department argued that the main target for the economy this year is a return to growth after a very deep six-year recession. It claimed that the recovery scenario is the most likely, “although some people remain seriously concerned regarding the considerable contractual factors that are continuing to affect domestic demand.”

It added that the marginal drop in private consumption recorded in late 2013 was partly due to the particularly low level of consumption recorded in late 2012.

The bank’s analysts noted it is very difficult to forecast when the economy will start to turn around, but the general course of the main indices from sectoral research and other parameters is pointing to a trend toward stabilization if not recovery of economic activity.

Since the start of the recession in 2008 the economy has shrunk by 24.7 percent in total, investments have declined by about 60 percent and the construction sector has crumbled by as much as 80 percent.

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