Q3 growth was bigger than thought

The provisional seasonally adjusted statistics for the Greek economy in the third quarter put annual growth at 1.6 percent, against an original estimate for 1.4 percent, according to a statement published on Friday by the Hellenic Statistical Authority.

Given the new data, which incorporate figures that weren’t available two weeks ago when ELSTAT issued its first estimate, the country’s economy expanded by 0.6 percent in the first nine months of the year, already attaining the rate that the government had set as a target for the whole year.

Consequently Finance Ministry officials estimate that it is very likely the budget target of 0.6 percent growth in 2014 will be exceeded, creating much more favorable conditions for the attainment of the 2.9 percent GDP expansion target next year.

Officials add that this better-than-expected GDP course constitutes a vital argument in the government’s tough negotiations with the creditor representatives. The latter have said that the 2.9 percent growth forecast is an optimistic one, but the ministry counters that this year’s outperformance will continue into 2015, making the target very much attainable.

The 1.6 percent growth was based on a number of factors that ELSTAT accounted for: The annual rise in consumption by 2 percent in the third quarter of this year, with private consumption rising 3.1 percent while state consumption fell 2.4 percent; the increase in exports by 8.6 percent to 14.3 billion euros from 13.2 billion in Q3 of 2013; the 2.9 percent rise in imports to reach 14.6 billion euros, against 14.2 billion a year earlier; and the growth in gross fixed capital formation by 1 percent to come to 5.1 billion euros, even though total investments shrank 17.7 percent.

On a quarterly basis, GDP rose by 0.7 percent from the second quarter, while the increase from the first to the second quarter had amounted to 0.4 percent, the seasonally adjusted figures showed.

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