ECONOMY

In Brief

Economy grew at 3.8 pct annual pace in third quarter Greece’s economy expanded at a healthy 3.8 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 1.8 percent over the previous three months after a 0.3 contraction in the second quarter, the National Statistics Service (NSS) said. Greece’s 180-billion-euro economy has managed a soft landing despite a drop in investment, avoiding the steep slowdown that some analysts feared after last year’s Olympic Games. Economists say consumer-led growth remains robust with net exports compensating for the slide in investment following the Games. The government’s 3.6 percent full-year growth target for 2005 will likely be met. Consumption grew 3.5 percent year-on-year in the third quarter, while investment was down 1 percent, NSS figures showed. Support for residential investment is seen as remaining strong as mortgage lending is growing by about 29 percent, due to a large part to prospective homebuyers rushing to avoid changes in real-estate tax that will go into effect in January next year. The 12-member eurozone economy grew at a 1.6 annual clip in the third quarter. (Reuters) ECB will be more cautious than the Fed, says Garganas The European Central Bank will not follow the US Federal Reserve model with a series of interest rate hikes after its recent move, Governing Council member Nicholas Garganas said yesterday. «We will not follow the model of the US Fed. (The recent rate increase) is not a precursor of a series of hikes,» Garganas, also governor of the Bank of Greece, told reporters after a meeting with Economy and Finance Minister Giorgos Alogoskoufis. Asked by reporters about the effect of the recent quarter-point rate increase in the refinancing rate to 2.25 percent, Garganas said, «It will not have an impact on the eurozone economy.» After the comments, the Bank of Greece issued the following statement with Garganas saying: «As regards the ECB’s future monetary policy stance, I will repeat the position of the Governing Council as expressed at its last meeting. As President Trichet has stated and as I mentioned earlier today, the Governing Council has not decided ex ante to undertake a sequence of interest rate hikes. Our decision to raise rates last week was based on the need to reduce monetary accommodation in the light of increased risks to price stability. We will continue to monitor closely all developments with regard to price stability, and any future decisions will be aimed at delivering price stability.» (Reuters) Higher sales Athens retail outlet Notos Galleries Home, part of the Notos Com retail group, yesterday reported a 53.4 percent rise in turnover to 11.42 million euros over the first three quarters. The group expects to add six new outlets to its existing 57 by the end of the year and is considering plans to expand its business abroad to a total of 48 outlets.