ECONOMY

Growth rate seen staying at 4 pct in Q3

Greece’s economic growth rate may reach an impressive 4 percent in the third quarter of the year, according to sources from the National Statistics Service (NSS). The increase is attributed mainly to a positive performance by investment, construction activity and private consumption. Industrial production also creates optimism, after a long period of shrinking. Two new NSS indices on industrial sales and new manufacturing orders showed high rises in June, reaching 20.5 percent and 15.9 percent respectively. «I do not see any risks for Greek growth by the rise in interest rates,» said Economy and Finance Minister Giorgos Alogoskoufis, in Singapore for the International Monetary Fund and World Bank conference. He added that the benefits from the rebound of the eurozone’s economy are greater than the pressures from the interest rate rise. Alogoskoufis repeated that, as things stand, there is no reason for revising budget forecasts for gross domestic product and inflation. Sources suggest however that the GDP target will probably be revised from 3.8 percent to 4 percent when the 2007 budget draft is tabled. Eurostat and the Bank of Greece expect this year’s growth to close at 3.5 percent, while the IMF forecasts 3.7 percent growth in its latest report. The IMF conference heard that global growth will reach 5.1 percent next year, recording a 50-year high. It also heard of three major threats to the world economy: 1) A slowdown in the US economy, where prices, consumption and property demands are already showing negative signs. 2) The price of oil, with the IMF expecting the average rate per barrel to come to $75 in 2007. The current decline in rates is linked with the drop in demand, while supply problems persist. 3) The existence of a high level of protectionism in markets.