ECONOMY

Building activity powers ahead in traditional show of resilience

Building activity continued to grow strongly in July, according to provisional data released by the National Statistics Service (EYSE) yesterday, underlining the construction sector’s staying power and the domestic economy’s resilience. EYSE said a total of 9,590 construction permits for both the private and public sectors were issued in July countrywide, up nearly 20 percent from the previous month. The strong gain pointed to the construction industry as the most dynamic sector of the economy. Strong domestic demand is expected to underpin Greek economic growth this year and next, helping it to ride out the global downturn. The construction figures are the latest indicators of Greek resilience. New vehicle registration figures released last week showed that the number of new vehicles on the road in November continued to remain at high levels despite a 5.7-percent decline. A 7.4-percent jump in September retail sales suggested that consumers were not put off by the global economic slowdown. Building activity has grown at a frenetic pace in recent years due in one part to Greeks’ traditional preference for investing in real estate and in another to declining interest rates. The ongoing battle among banks for a bigger slice of the housing market has brought mortgage rates down to as low as 3.6 percent, with one bank even offering zero interest for the first six months. The construction boom is set to continue amid signs that the Finance Ministry plans to jack up taxable property values in January 2003 after Thursday’s announcement of increases of up to 60 percent in objective real estate values, effective February 1, 2002. EYSE’s latest figures showed that slightly more than a third or 3,816 construction permits for July were given out in Attica while 1,321 were issued in central Macedonia and the rest spread across the country. Private building activity accounted for 9,566 of the licenses, marking a 11.2 percent increase year-on-year. In the seven-month period to July, 46,139 permits were handed out, of which 45,858 went to the private sector, up 8.4 percent from the same period in 2000. A third of the licenses were for construction projects in Attica. Five-year investment plans are backed by detailed technical documentation and Vlahovic said he expected no problems. The Serbian privatization scheme is part of reforms agreed to with the International Monetary Fund. Under the reform agenda with the IMF, Serbia was due to complete at least one major privatization in 2001.