ECONOMY

GDP up 4.4 pct in 3rd quarter, fueled by hike in investment

Sustained by strong investments and exports, Greece’s gross domestic product (GDP) in the third quarter of the year rose by 4.4 percent year-on-year, data released by the National Statistics Service (ESYE) yesterday showed. The figure brought the annual rate of growth so far this year to 5.1 percent. The third-quarter growth followed equally strong gains in the first and second quarters, up by 6.1 percent and 4.9 percent respectively. Greek GDP in the third quarter rose by 1.7 percent from the previous quarter, ESYE said. The sustained pace appeared to bear out official optimism that the Greek economy will significantly outperform the eurozone this year. The official growth rate for this year is projected at 4.1 percent, still considered a strong showing despite two downward revisions. In contrast, the eurozone has seen growth affected by the global slowdown brought on by the September 11 events. Eurostat figures released last month showed eurozone GDP in the third quarter up by just 1.3 percent and in the European Union up by 1.4 percent, compared with the same period in 2000. Compared with the second quarter of the year, GDP growth in the eurozone came to 0.1 percent and in the EU 0.2 percent. ESYE said that third-quarter growth had been fueled by the double-digit increase in investments, up by 10.4 percent year-on-year and by 2.8 percent quarter-on-quarter. It said the third-quarter increase was among the biggest in the 1998-2001 period. The 7.7-percent year-on-year jump in exports (3.1 percent quarter-on-quarter) and the 6.3-percent increase year-on-year rise in imports, as against 3.1 percent quarter-on-quarter, also sustained third-quarter growth. Final consumption was up by 2.6 percent. The upbeat statistics from ESYE came as the Foundation for Economic and Industrial Research (IOBE) reported that the business climate index was holding up well in the face of the deteriorating global economy compared with the EU. The indicator edged up to 101.7 points in November from 101.6 in the previous month while the eurozone figure worsened to 98.6 points from 99.1. The figures showed that developments after September 11 have affected Greece more moderately than the bigger EU economies, the economic think-tank said. On a sectoral basis, businesses were less confident about the future than consumers and the construction industry. The business expectations index for the manufacturing sector in November fell to 100.3 points from 106 as companies expressed concerned over future orders and surplus stocks. Despite slowing demand, production continued to increase at relatively high levels. Construction companies, by contrast, were clearly confident about future prospects as the business expectation index for this sector showed a clear hike. Retailers in turn had moderate expectations for the short term but were more optimistic about the long term.