ECONOMY

In Brief

Growth rate at 3.7 pct, lower than annual target Greece’s economy will maintain an expansion rate of higher than 3.5 percent this year but will not reach a government growth target of 3.9 percent, the country’s statistics service (NSS) said yesterday. «GDP growth will not reach 3.9 percent this year but will stay above 3.5 percent,» the NSS said. Earlier, it said the economy grew 3.7 percent in the second quarter year-on-year, against 3.5 percent in the first quarter. Consumption was up 3.6 percent, contributing 2.3 percent to the growth of final demand; investment was down 4.5 percent, while exports rose 2.4 percent and imports declined 5.8 percent, year-on-year. Revenues rebound, but outlook stays demanding Budget revenues rose by a hefty 9.8 percent in August after seven months of relative stagnation, bolstered by a wave of property transfers, dividends from government holdings in utilities and other organizations, and one-off sums paid by the self-employed for a tax amnesty for the years 1998-2002. However, the budget provides for an annual revenue rise of 11.4 percent and, for this to be attained, tax collection will have to advance at an average 15 percent pace in the remaining four months of the year. The Finance Ministry is resting its hopes on the securitization of overdue taxes – pending EU approval, from which it hopes to raise about 1.5 billion euros, and privatization revenues. Inflation Greece’s consumer price inflation (CPI) slowed to 3.7 percent year-on-year in August from 3.9 percent in July, slightly below market expectations, affected by high oil prices, National Statistics Service (NSS) data showed yesterday. «There was a 0.4 percent drop in August inflation due to summer sales and a 0.15 percent increase due to oil prices,» the NSS said. NSS General Secretary Manolis Kontopyrakis said CPI is expected to remain stable at 3.6-3.7 percent in September, on condition that oil prices remain at current levels. Kontopyrakis also forecast 2005 inflation averaging out at 3.5 percent. (Reuters) Bourse cooperation The stock exchanges of Greece and Cyprus are to sign an agreement next week for the creation of a common trading platform between the two markets, officials said yesterday. «We are hoping for the platform to be in operation on January 1, 2006,» said Cyprus Stock Exchange (CSE) Chairman Akis Kleanthous. Stocks traded on the platform would be denominated in euros. (Reuters) Car sales August saw a disappointing 21 percent monthly decline in car sales in Greece, according to data from the Association of Motor Vehicle Importers-Representatives (SEAA). Only 20,818 units were sold last month, from 26,379 in July. The upward trend from last year continues, although the 61 percent year-on-year rise in August is related to the Olympics last year. Hyundai still led sales with an 8.7 percent market share, followed by Toyota and Volkswagen.