Recession soared to 7.2 percent in the third quarter of the year, the Hellenic Statistical Authority (ELSTAT) announced on Wednesday, making the summer of 2012 the worst quarter since the crisis started.
In the period from July to September, the country’s gross domestic product contracted to 44.5 billion euros – against 48 billion in the same quarter last year – the lowest amount recorded in the last seven years. This adds up to a total contraction of 6.7 percent in the year to September.
Consequently, for the country’s economy to achieve the target set out in the midterm fiscal plan that was voted on in Parliament last week – for a GDP contraction of 6.5 percent this year – negative growth will have to be limited to 5.8 percent in the last quarter of the year. Analysts are expressing doubt regarding the feasibility of that target, given that until early this week the economy had been suffering from uncertainty of whether the next bailout tranche would be disbursed after all.
Last year the summer season had been the best quarter of the year, but this year it shaved 3.5 billion euros off the Greek economy. Experts attribute this output decline to reduced tourism, the continuing decline in investment and consumption, and the fact that the figures are compared with those of a relatively good quarter (July-September 2011). All this has rendered the GDP decline more acute in Q3.
The third quarter of 2012 was the 17th in a row to see economic activity shrink, with estimates by the government and its creditors concurring that the recession will continue up to the second quarter of 2013. Government sources say the new austerity measures will have a significant impact on the course of the economy, but the Finance Ministry hopes that channeling funds into the market will serve to prevent a further shrinking of GDP in the latter half of next year.
On a quarterly basis there was a slight increase of 3.6 percent, as in Q2 economic output had amounted to 43 billion euros. This, however, has always been the case between the second and third quarters in Greece, and in previous years the rise had been bigger than that recorded this year.