ECONOMY

Growth still strong

Greece’s economy expanded at a healthy 3.7 percent annual pace in the third quarter, continuing to outperform the eurozone as a whole, with activity picking up from the previous quarter, official data showed yesterday. Helped by higher exports and private consumption, the economy grew by 1.7 percent over the previous three months after a 0.3 contraction in the second quarter, the country’s statistics service (NSS) said. Year-on-year growth in the second quarter was also at 3.7 percent. Greece’s 180-billion-euro economy has avoided a steep slowdown that some analysts feared after last year’s Olympic Games despite a drop in investments. Economists say the government’s 3.6 percent growth target for this year will be met. «The 3.7 percent rate was expected, with private consumption and exports continuing to grow at a satisfactory pace while imports are slowing down from last year’s high levels, which were due to the 2004 Athens Olympics,» said economist Dimitris Maroulis at Alpha Bank. «We are forecasting average growth of 3.6 percent for 2005.» Greece is projecting economic growth will accelerate to 3.8 percent next year despite a belt-tightening budget to squeeze the budget deficit below the EU’s 3 percent cap to avoid sanctions. The 12-member eurozone economy grew at a 1.1 percent annual clip in the second quarter. Other economic data released by the country’s statistics service yesterday showed a slowdown in industrial output in September on lower electricity output but an improvement in manufacturing. Analysts said the slight increase in manufacturing activity was likely to continue as October Purchasing Managers Index (PMI) data provide positive guidance. «Despite a weaker euro, industrial production has been rather disappointing in the year to date. There is some hope for a mild bounce in the month ahead given the recent rise in Greek manufacturing PMI,» said economist Platon Monokroussos at EFG Eurobank. (Reuters)