Firms will have to replace stock sold in slump

The economy is already on the course to recovery, according to an Alpha Bank analysis, but it would have seen a better performance if domestic output had improved as domestic demand expanded by 2.2 percent in the third quarter of 2014.

Domestic output failed to match the rise in demand and an increase in collections from tourism and shipping, resulting in the reduction of stocks (that deducted 1.82 percentage points from the growth of the gross domestic product in the third quarter of 2014) and in the major rise in imports.

In other words, corporations did not expect such a great growth in demand and were forced to respond not by increasing their production but by reducing their stocks and increasing imports. This means that production should grow in the coming months as enterprises seek to replace the stock they sold, given that all signs are pointing to demand returning to higher levels.

The increase in consumption has been attributed to the growth in employment in 2014 and the improvement of the economic climate in the country, according to the authors of the report, while the impressive rise of tourism and significant growth in shipping are due to an increase in global demand and the comparative advantages and high competitiveness of Greece in these sectors.