ECONOMY

First quarter economy figures worsen

Greece?s statistics service said on Thursday the recession was deeper than initially estimated in the first quarter of the year after the country?s creditors predicted a harsher downturn ahead.

Data from the Hellenic Statistical Authority (ELSTAT) showed that Greece?s gross domestic product (GDP) contracted 5.5 percent year-on-year from January to March, versus an previous estimate for contraction of 4.8 percent.

On a quarterly basis, Greek GDP expanded by 0.2 percent ELSTAT said, revising lower a previous 0.8 percent growth estimate. The previous figures had been issued in mid May.

Public and private consumption spending fell by an annual pace of 6.9 percent to 52.3 billion euros while investments plummeted to 7.2 billion euros, down 19.2 percent, ELSTAT said.

As the Greek government and European Union struggle to get a grip on the country?s debt crisis and prevent it from spreading across the single currency area, weak business and consumer sentiment have pulled the break on spending, sending the jobless rate to a record high of 16.2 percent in March.

The EU, International Monetary Fund (IMF) and European Central Bank (ECB) said on Wednesday that the Greek economy is seen shrinking by 3.8 percent this year, revising lower a previous estimate for contraction of 3.5 percent.

Following a review of the local economy completed this month, the three said in a report that growth next year will be weaker than initially thought at 0.6 percent of GDP.

The previous forecast for 2012 was for an expansion of 1.1 percent.