Economy and pensions continue to shrink

The recession in the first quarter of the year was deeper than expected according to a provisional estimate by the Hellenic Statistical Authority (ELSTAT), as the country’s gross domestic product shrank 5.6 percent against a previous assessment of 5.3 percent.

The figures released by ELSTAT on Friday showed GDP at 37.7 billion euros in the period from January to March 2013 – the lowest quarterly GDP since 2000.

This new reduction in economic activity is mainly attributed to the further decrease in consumption and investment. At the same time exports posted a decline, which is generating worries at the Finance Ministry as the government is pinning its hopes on the strengthening of exporting activity being one of the pillars on which Greece’s economic recovery will be based.

For this year, the memorandum signed by Athens and its international creditors provides for an economic contraction of 4.2 percent, while the Finance Ministry expects it to be 4.5 percent and a recent report by the International Monetary Fund puts the figure at 4.9 percent.

ELSTAT recorded an 8.3 percent drop in consumption in the first quarter from the same period in 2012, with private consumption falling 8.7 percent and state consumption sliding 7 percent. Total consumption declined from 38.5 billion euros in January-March 2012 to 35.3 billion euros in the same period this year.

Investment contracted by 11.4 percent year-on-year, amounting to 5.1 billion euros in Q1 this year against 5.7 billion euros last year. Notably, in the last quarter of 2012 investment came to 5.9 billion euros.

Imports decreased 7.8 percent in the first quarter of the year, dropping to 11.2 billion euros from 12.1 billion in the same quarter in 2012. Exports declined by 2.6 percent on an annual basis: They shrank from 8.6 billion euros in Q1 of last year to 8.4 billion this year.

Separately, the average monthly pension in Greece has dropped below 700 euros per month as a result of the various cuts imposed over the last few years.

Using data from the recently introduced Helios system for the monitoring and payment of pensions, it appears that the state pays over 4.4 million pensions, most through the Social Security Foundation (IKA), and the average pension amounts to 694.56 euros per month.

In total the state will pay 2.3 billion euros for main and auxiliary pensions this month.

Labor Minister Yiannis Vroutsis said on Friday that the new system “is for the first time shedding some light on the dark and gray areas of the social security system, securing absolute transparency.” This became possible after identifying the pensioners of all 93 social security funds and pension sections and confirming analytical data, and after the completion of a census of all pensioners.

Most pensions are paid to recipients in Attica (1,692,037), followed by Central Macedonia, including Thessaloniki (724,087) and Thessaly (304,552).

Some 12,000 pensioners were found to be collecting four pensions every month from various sources (i.e. main and auxiliary social security funds).

Among the millions of pensioners there are 9,099 who are foreign citizens. The biggest group are Albanians (2,252), followed by Bulgarians (1,843) and Turks (1,116).