ECONOMY

Slowdown in economy affected new car registrations in 2001

New private passenger car registrations plummeted by 17 percent year-on-year in December, according to data released by the National Statistical Service (NSS) yesterday, providing evidence yet again of the slowdown in the Greek economy in the final quarter of 2001. The decline in last month’s new car registration total was more than double the 7.9 percent drop recorded in November. NSS statistics showed a cumulative drop of 4.2 percent in total new car registrations for 2001. The slowdown was less severe in total vehicle registration, which declined by 4.6 percent to 18,971 in December while over the 12-month period, the drop was just 3.3 percent. The latest figures came on top of retail sales data released earlier in the week which underlined the deceleration in consumer spending. EYSE figures showed a 4.1-percent year-on-year increase in retail sales in October, down from 7.4 percent in the previous month. While the majority of economic indicators pointed to a slowdown in the last quarter of the year, businesses continued to be cautiously optimistic. The Foundation for Economic and Industrial Research early this week said its business sentiments index for December improved marginally to 101.9 from 101.7 in the preceding month, principally on the back of the continued construction boom. Despite the slowdown, Greece is expected to outgrow its eurozone partners this year, with structural reforms seen as playing a crucial role in achieving the goal, Economy and Finance Minister Nikos Christodoulakis reiterated yesterday after briefing Premier Costas Simitis on projected economic developments this year. «This will be a year of strong growth for Greece, significantly better than any other country in Europe,» he told reporters. The minister said the key to growth would be structural reforms. «For the Greek economy to be able to accelerate toward real convergence we should continue with, broaden and strengthen structural reforms in order to reinforce [Greece’s] competitiveness and create jobs,» he stressed. Christodoulakis said key reforms would be in the social security system and the tax structure. The former is critical in view of the country’s demographic problem and the latter because of its contribution to the state coffers and impact on businesses. The minister said consumers should see an easing of inflationary pressures this year, with average inflation projected to dip below last year’s figure of 3.4 percent. The minister stressed that high consumer prices, which soared to 3 percent year-on-year last month, would continue into this month as a result of weather-related price gouging and base effects.