BUSINESS

Greek economy grows 0.5 pct in third quarter, beats forecasts

GEORGE GEORGIOPOULOS

TAGS: Economy

Greece's economy expanded for the second quarter in a row and by more than analysts had expected between July and September, statistics service data showed on Monday, boding well for a stronger recovery next year following a protracted recession.

The flash estimates showed a 0.5 percent expansion in the third quarter, compared with gross domestic product growth of an upwardly revised 0.3 percent in the second quarter.

Faced with a second bailout review entailing an unpopular liberalization of labor laws, Athens is keen to show that the taxation and pension cuts that came with last year's 86-billion-euro bailout deal will bear fruit and lead to economic recovery.

The seasonally adjusted data showed annual growth of 1.5 percent, much faster than in the April-to-June quarter when the economy shrank by an upwardly revised 0.6 percent.

"The readings were clearly above market expectations, pointing to a slightly positive print for the full year," Eurobank's chief economist Platon Monokroussos said.

"We expect fourth quarter GDP to remain on a positive trajectory, both on a quarterly and yearly basis, with our full-year forecast now standing at 0.1 percent," he said.

The European Commission and Greece's central bank have been projecting a 0.3 percent economic contraction this year.

The EU sees the economy rebounding by 2.7 percent next year, while the Bank of Greece projects it will expand by 2.5 percent.

Economists expect public investment spending to support fourth quarter gross domestic product.

The flash estimates are expected to be revised on November 29, the statistics office said.

"The flash readings were above forecasts of around 0.2 percent, showing that the economy did not rely just on tourism but was helped by domestic demand and improved liquidity in the corporate sector amid clearance of arrears," National Bank economist Nikos Magginas said. 

[Reuters]

 

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