ECONOMY

Greek recession eases in Q3, unemployment stubborn

Greece’s economy shrank by a slightly better-than-expected 3 percent in the third quarter compared with the same period last year, its smallest such decline in nearly three years, thanks to a rebound in tourism.

The flash estimate of gross domestic product released by statistics service ELSTAT on Thursday marked the smallest fall in economic output since the third quarter of 2010. Economists had forecast a 3.1 percent contraction.

“The reading was broadly in line with expectations, reflecting mainly the positive impact of strong tourism revenues,” said economist Platon Monokroussos at Athens-based Eurobank. “The figure supports our forecast for a full-year reading less than -4.0 percent.”

The seasonally unadjusted data followed a downwardly revised 3.7 percent slump in the second quarter, bringing the economy’s annual contraction in the three quarters to 4.0 percent.

Greece does not publish official quarter-on-quarter changes in GDP.

Tourism, which accounts for about a fifth of Greek GDP, is rebounding and revenues, which fell about 5 percent last year, jumped 13.7 percent in the first eight months of this year.

Officials expect tourism revenues to rise by 10 percent in 2013 to 11 billion euros on a record 17 million visitors this year, a million more than last year.

The country’s international lenders, funding its 240 billion euro bailout project, predict the economy will shrink by 4.0 percent this year before a mild recovery takes root next year.

There was little solace on unemployment, however, as fresh data on Thursday showed continuing pain caused by austerity measures imposed on Greece due to its EU/IMF bailout program.

The jobless rate held steady at 27.3 percent in August, more than twice the average rate in the euro zone of 12.2 percent in September.

The overall unemployment rate has more than tripled since 2008, the start of a six-year recession which has wiped out about a quarter of Greece’s economy.

Joblessness is a major headache for the government as it scrambles to hit fiscal targets and carry out structural reforms demanded by its international creditors.

Correcting Greece’s economic imbalances has come at a high social cost, with 1.36 million people officially without work.

Data showed those aged 15 to 24 remained the hardest-hit. The jobless rate in that age group, excluding students and military conscripts, was 60.6 percent in August. [Reuters]