ECONOMY

Greek output plunges, jobless rate near record highs

Greece’s industrial output plunged in October and its jobless rate remained near record highs, reflecting the deep economic malaise in a country wracked by a debt crisis, data showed on Thursday.

Austerity measures like higher taxes and cuts in public sector pay and pensions have stifled domestic demand as Greece struggles through its fourth straight year of recession.

The initial trigger for the eurozone debt crisis that threatens to unravel the common currency, Greece’s 220 billion euro economy is seen contracting by more than 5.5 percent this year, with recovery not expected before 2013.

Data released by statistics service ELSTAT showed the annual pace of contraction in industrial output accelerated from a 1.7 percent drop in September, contracting 12.3 percent in October. Manufacturing production also declined 11.9 percent.

“The big drop in the October industrial output year-on-year reading reflects depressed domestic demand and slowing export activity due to weakening conditions in main trading partners,» said EFG Eurobank economist Platon Monokroussos.

Industrial production fell 5.8 percent in 2010 and has been in steady decline since at least January 2009.

With the economy contracting for a fourth consecutive year in 2011 unemployment has risen sharply, adding to public discontent. The official jobless rate eased in September after hitting a record high of 18.4 percent in August, but remained at a historically high level of 17.5 percent.

The number of the unemployed grew to 857,656 in September from 627,715 in the same month a year earlier.

Greece’s jobless rate, which is not adjusted for seasonal factors, is well above the 10.2 percent average in the 17-nation euro zone.

Young people — who have led protests against the government and austerity measures in recent months — continued to be the hardest hit, with the jobless rate in the 15-24 category worsening to 46.4 percent from 43.5 percent in August.

Athens is under pressure from its international lenders to meet targets under a bailout plan to prevent the country from defaulting on its debt, with the focus on cutting its deficit and structural reforms to make its economy more competitive.

The new coalition government, backed by three major parties, on Tuesday passed an austerity budget that targets a primary surplus — revenues exceeding spending excluding interest payments on debt — for the first time since 2002.

Athens is keen to convince financial markets, the International Monetary Fund and its euro zone partners providing its bailout funding that it is back on track to sorting out its finances.

[Reuters]