The Greek economy is officially back in recession, having posted a quarterly contraction of 0.2 percent in the first quarter of the year from the October-December 2014 period and clocking up a second quarter in a row when gross domestic product declined, the Hellenic Statistical Authority (ELSTAT) announced on Wednesday.
Given that the January-March period posted feeble growth of just 0.3 percent growth from the year before, according to the seasonally adjusted figures, it is clear that the target for a 2.9 percent expansion throughout 2015 that the year’s budget had provided for is simply not attainable.
Given the stagnation observed in the first quarter and the increased uncertainty as Q2 reaches its halfway mark, the latest projections by the Finance Ministry point to growth of 1 percent at best this year, but the country’s creditors are less optimistic, expecting the figure to hover around zero. They have even drafted scenarios pointing to a recession for the entire year, as negotiations continue with no end in sight as yet.
The GDP decline started during the last quarter of 2014 as the elections loomed, putting an end to the rising trajectory of the first three quarters of last year. The marginal annual growth rate of 0.3 percent in Q1 shows that the economy has hit the brakes following annual growth of 1.3 percent in the last quarter of 2014 and a 1.5 percent expansion in Q3. GDP growth came to just 0.3 percent in the second quarter of 2014.
In a comment on the GDP data in the first quarter of the year, Eurobank said yesterday that the figures were actually better than the lender had anticipated.
The statistics announced by ELSTAT are its preliminary estimates and are based on data from the production sector. The provisional estimates by the statistical authority that should reflect the course of the economy in Q1 more accurately will be published on May 29.