ECONOMY

Greece outdistances partners in third-quarter growth rate

BRUSSELS – Greece’s gross domestic product (GDP) grew at an impressive 5 percent rate in the third quarter of 2003 year-on-year, compared to averages of 0.6 percent for the European Union as a whole and 0.3 percent for the eurozone, Eurostat, the EU statistics service, said yesterday. The rate showed a rising acceleration, from 3.2 percent growth in the last quarter of 2002, to 4.3 percent in the first quarter and 4.5 percent in the second quarter of 2003. In relation to the second quarter, the growth rate was 1.8 percent, again the highest in the EU. This outperformance, however, cannot conceal the Greek economy’s fundamental weaknesses, particularly with respect to competitiveness, public debt and growing public deficits. It appears to be mainly the result of rising domestic demand due to large public – EU-subsidized – and Olympic projects and, to a lesser extent, to pay raises, tax breaks and low interest rates. Domestic demand advanced at a rate of 5.2 percent in the third quarter, year-on-year, while imports rose 4.2 percent. Exports also rose, at 3.2 percent, but from especially low levels. In the last quarter of 2002, they declined 8.1 percent, remaining virtually unchanged in the first two quarters of this year. The country’s trade deficit reached 2.7 billion euros, with imports at 7.8 billion and imports rising to 10.5 billion euros. The trade deficit was the second largest after Spain’s, with exports lower even than recession-hit Portugal’s, which rose 5.2 percent. Greece’s exports equaled about one-third of Denmark’s, one-eighth of Belgium’s and one-tenth of Holland’s. Figures for Luxembourg were unavailable.