Greece’s economy shrank in the first quarter at its slowest annual pace since late 2008 when its protracted recession began, data showed on Friday, supporting projections that Athens will emerge from a crippling six-year slump this year.
Gross domestic product, based on seasonally unadjusted data, shrank 0.9 percent year-on-year, less than a previous -1.1 percent flash estimate by the country’s statistics service ELSTAT last month.
The GDP reading marked the fourth straight quarter of decelerating economic contraction.
Greece and its international lenders project the battered economy will pull out of recession this year and expand by 0.6 percent, helped by investments, exports and tourism.
Athens has enjoyed a boost in fortunes in recent months, buoyed by a successful bond sale – its first in four years – and improved market sentiment since nearly crashing out of the euro in 2012.
“A pretty encouraging figure, coming close to our estimate of -0.8 percent and suggesting a nearly flat quarter-on-quarter reading on seasonally adjusted terms,” said economist Platon Monokroussos at Athens-based Eurobank.
The pace of the recession weakened sharply last year with the decline in output slowing from 6 percent in the first quarter to 2.3 percent in the last quarter, resulting in an annual contraction of 3.9 percent for 2013 as a whole.
ELSTAT does not provide seasonally adjusted quarter-on-quarter data, which most countries use to measure their economic performance.
“Looking ahead, we forecast a switch to positive year-on-year growth from the third quarter onwards and a positive reading of between 0.6 to 1 percent for the full year,» Monokroussos said.
Hit by austerity policies imposed by EU/IMF international lenders who bailed out Greece, the economy has shrunk by almost a quarter over six years, suffering its most protracted recession since World War II.
A key driver of the decline has been a 26 percent slump in household consumption as record unemployment and wage cuts slashed disposable incomes, coupled by a sharp fall in investment. The latest data showed a positive contribution from consumption and net exports.
Consumption rose 0.8 percent year-on-year but gross capital investment fell 7.9 percent. Exports grew 5.4 percent compared to the same quarter last year while imports rose 2.2 percent.