Exporting, investment boost GDP

The Greek economy grew 4.1-4.2 percent last year, against an original forecast of 3.8 percent, relying mostly on investments and exports, according to provisional data for 2006 by the National Statistics Service (NSS). The final figures, due to be published next week, are projected to picture exports and investments as the main growth drivers. The NSS data show that exports grew by 19 percent in the first 11 months of 2006, from 13 percent in all of 2005. The Economy Ministry figures suggest that investment incentives legislation introduced two years ago is bearing fruit: From March 2004 to date, as many as 2,872 investment plans have received approval, totaling -5.5 billion. Also encouraging is the course of the economic climate index, which has been on a steady rise since June 2005. Total investment in the first 10 months of 2006 was up by 10 percent, while the foreign capital flowing into Greece destined for direct investment came to -4 billion in the January-November 2006 period. NSS sources suggest that the trend of growth is showing some permanent features, including the very good performance of the private sector. Greek growth is also bolstered by the positive economic climate in Europe, as any rise in financial activity on the Continent translates into more Greek exports. For 2006, both Eurostat and the Bank of Greece had predicted growth at just 3.5 percent. The International Monetary Fund in an earlier report had estimated growth at 3.7 percent, while the Organization for Economic Cooperation and Development stressed that growth would reach 4 percent in 2006 and decline to 3.8 percent in 2007 and 2008, with the economy starting to rely considerably on investment.