ECONOMY

First quarter GDP up 4.3 pct

The economy expanded by a robust 4.3 percent in the first quarter with the main drivers of growth coming from strong domestic consumption and investment spending. Economists said the figures released by the National Statistics Service (NSS) yesterday indicated that Greece could be heading for another year of strong growth this year even as the eurozone struggles to avoid a recession. The European Commission last month revised its growth forecast for the region, saying weak domestic demand and slowing US growth could tip the eurozone into a recession in the first quarter. «Greece’s first quarter growth numbers are very encouraging and show that the annual growth target of 3.8 percent is realistic,» said Christos Avramides, economist at Proton Investment Bank. The 4.3 percent expansion in the first quarter followed growth of 3.4 percent in the final quarter of 2002, the slowest pace last year. Final consumption rose 3.6 percent, after slowing to 2.7 percent in the final quarter of 2002, due to the combination of low interest rates and inflow of EU funds. Investments increased 7.9 percent from 6.2 percent in the previous month, underscoring the contribution of Olympic Games projects. «Olympic Games-related investments are now at a peak,» said Avramides. The Games are currently expected to add 0.2 percentage points to GDP, with the figure projected to double to 0.4 percentage points in the period 2004-2010. Weak exports are a cause for concern, said Avramides, as they point to a competitiveness issue and the impact of a strong euro. Exports fell 0.5 percent in the first quarter, the eighth drop in a row.