BUSINESS

Greek economic growth slows in second quarter, investments a drag

TAGS: Economy

Greece's economy expanded for a sixth straight quarter in the April-to-June period but at a slower pace than the quarter before, mainly because of base effects and weak investment spending, statistics service (ELSTAT) data showed on Monday.

Seasonally adjusted data showed gross domestic product grew 0.2 percent in the second quarter compared with an upwardly revised 0.9 percent in January-to-March.

On an annual basis, Greece's economic expansion decelerated to 1.8 percent in the second quarter from an upwardly revised 2.5 percent in the first quarter.

"The recovery is continuing, helped by private consumption and to a lesser extent by net exports, on year-on-year terms," said National Bank economist Nikos Magginas. "The slowdown is mainly due to base effects and weak investment spending."

The data showed that gross fixed capital formation fell 5.3 percent year-on-year in the second quarter, a smaller decline than in the first quarter.

"Continued weakness in investments is a source of concern," said Eurobank's chief economist Tassos Anastasatos. "The performance is compatible with the EU Commission projection for 1.9 percent full-year growth."

The latest EU Commission forecast sees Greece's184 billion- euro ($213.40 billion) economy expanding by 1.9 percent in 2018.

The International Monetary Fund projects growth of 2.0 percent.

"Maintaining and enhancing market trust post-bailout is crucial and for that reason policy consistency will be key," Anastasatos said.

The data showed that on an annual basis, net exports made a positive contribution from – export grew 9.5 percent, outpacing a 4.2 percent rise in imports.

Private consumption grew 0.4 percent versus 1.3 percent in the first three months of the year. [Reuters]


 

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