ECONOMY

Greek economy slowed down at the end of 2002

Brussels – Greece’s economy posted negative growth during the final quarter of 2002, according to the revised results presented yesterday by Eurostat, the European Commission’s statistics service. Specifically, the country’s gross domestic product (GDP) declined 0.3 percent during the fourth quarter compared to the third quarter of the same year. This was the second worst performance in Europe, behind Portugal, where GDP declined 0.8 percent. In the same quarter, both the Netherlands and Austria also posted negative growth (0.1 percent), while Denmark and Germany had zero growth. Finland topped the EU, with 0.7 percent growth. When measuring growth in a more conventional manner, by comparing the same quarters of two consecutive years, Greek growth in the fourth quarter was 3.4 percent, the best performance in Europe. However, the previous number is a clear indication of a slowdown in Greece’s growth. For 2002 as a whole, its GDP grew 4 percent. During the first quarter of 2002, Greek growth was running at a 4.5 percent annual pace, slowing down to 3.7 percent during the second quarter. The statistics also showed that Greece’s permanent trade deficit grew even worse. At the end of 2002, it stood at 2.3 billion euros, a 7.2 percent increase from the end of the third quarter. On the other hand, domestic demand remained quite strong last year, increasing 3.4 percent from 2001. The increase was achieved despite the drop both in imports and exports. Greek exports, in particular, declined 4.9 percent compared to 2001. This leaves Greece the EU’s lowest exporter, behind even Luxembourg, not just in relative but also in absolute terms. Overall, Greece’s economy grew much faster than that of the EU in general, almost four times as fast. Whatever growth took place was driven by private consumption, which rose 0.6 percent in both the third and fourth quarters. In the eurozone, which includes 12 of the EU’s 15 member states – all but Denmark, Sweden and the United Kingdom – private consumption rose 0.5 percent in the third quarter of 2002 and 0.4 percent in the third quarter. Eurozone exports remained stagnant for the eurozone, while they declined 0.5 percent for all of the EU.