The Greek economy’s growth rate failed to meet expectations in what is traditionally the country’s best quarter, as gross domestic product rose by just 1.3 percent on an annual basis in the July-September period according to provisional figures the Hellenic Statistical Authority (ELSTAT) released on Monday. Tourism was the only main force powering this moderate growth, as the figures for investments and consumption were disappointing.
Based on the Q3 rate, it will require a jump of 3.1 percent in the last quarter of the year for the revised budget target of 1.6 percent growth to be attained, even though the second-quarter figures have been upwardly revised to 0.8 percent year-on-year.
For its part, the government insists that the forecast target is still possible. The Finance Ministry has hinted that the revision of the second quarter means a similar adjustment should be expected for the summer quarter too
“We need to wait for the final results of the third quarter to deduce any safe conclusions about 2017,” the ministry told reporters: “We are confident the forecast for an annual rate of 1.6 percent will be achieved in 2017.”
The government clearly expects GDP to grow in the last quarter and that the handouts from a part of the primary surplus overshoot, known as the “social dividend,” can revive the consumer market ahead of the Christmas period.
Experienced academics agree with the estimate that the growth rate of Q3 will be upwardly revised, but add that the adjustment and a hopefully strong fourth quarter will not suffice to see the year meet the government’s growth target. They see the expansion at 1.3 percent instead.
Meanwhile on Monday the European Stability Mechanism (ESM) said the short-term measures it has applied to contain the Greek debt will entail a debt lightening of 25 percent of GDP by 2060, while the gross funding costs of the debt will be reduced by 6 percent of GDP – this is better than previous estimates for 20 percent and 5 percent of GDP respectively.
ESM chief Klaus Regling called on Athens to continue on the reform path.