Q1 GDP drop was less than expected
The revised rate of 0.9 percent for the contraction of Greece’s gross domestic product in the first quarter of the year may have generated more optimism that the government will be able to attain its target of returning to growth by year-end, but this was tempered by April’s exports figures, which showed a yearly decline of more than 20 percent.
The Hellenic Statistical Authority (ELSTAT) announced on Friday its revised recession estimate for the January-March 2014 period, which was two tenths of a percentage point below the flash estimate of 1.1 percent that had originally been issued. This is the lowest rate of GDP contraction in the last four years, while a year earlier the shrinkage had amounted to 6 percent.
ELSTAT also published its data on Greece’s external trade, which make for particularly worrying reading. Exports in April dropped 20.9 percent to 2.02 billion euros on an annual basis, compared with 2.55 billion in April 2013. When fuel products are excluded the decline amounts to 12.4 percent. Exports to non-European Union countries declined by 29 percent and to fellow EU states by 11.8 percent.
On a 12-month basis in the period from May 2013 to April 2014 exports posted a contraction of 5.3 percent compared to the same period a year earlier. Commenting on the course of exports, the Panhellenic Exporters Association noted on Friday that the April decline constitutes the second-biggest drop on a monthly basis in the last three years, behind last November’s 21.5 percent decrease.
Analysis by the association and its Exports Research Center (KEEM) show that this decline in exports is directly linked to developments in Cyprus last year, as there was a strong rebound (up 13.6 percent) in April 2013 from the decline recorded due to the island nation’s March crisis that had a significant impact on Greece’s external trade.
However, car sales headed in the opposite direction: In May the number of new cars on Greek roads amounted to 10,165, up 48.6 percent on the same month last year. In the first five months of 2014 the year-on-year increase stood at 24.7 percent. This is seen to be associated with the growth of tourism, as car rental companies and hotels are keen to replace or expand their fleets of vehicles.
