GDP drops 6.2 pct, sell-offs halted

The Greek economy hit its lowest point in the last seven years during the January-March period, as gross domestic product contracted by 6.2 percent compared to the same period last year, according to data released on Tuesday by the Hellenic Statistical Authority (ELSTAT).

This suggests that the budget forecast for a 4.7 percent contraction this year appears too optimistic at this stage, given also that the situation in the second and the third quarter of the year is set to deteriorate further owing to the political uncertainty. This means that additional measures for 2012 will be needed if the target of reducing the deficit to 13.7 billion euros is to be met.

There is little in the current climate to encourage investment or consumption, which have also contracted drastically.

On Tuesday the TAIPED state privatization fund decided to freeze the country?s sell-off program as many members of its board refused to approve the recommendations of its management regarding the promotion of privatization projects.