Greek growth slowest since 2005

Greek economic growth slowed to the lowest pace in more than two years, the National Statistics Service (NSS) said. Gross domestic product increased at an annual rate of 3.6 percent in the three months through September from 4.1 percent in the second quarter, according to preliminary figures e- mailed yesterday from the NSS in Athens. That’s the slowest annual pace since the first quarter of 2005. «That’s below our estimate of 3.9 percent,» Pavlos Mylonas, chief economist at National Bank, the country’s biggest lender, said in a phone interview. «Slowing investment is the key suspect, but there could also have been a negative contribution from imports or exports,» he added. The NSS won’t provide a detailed breakdown of economic growth before December 14, when it’s scheduled to release revised GDP figures for 2000-2006. «Robust» domestic demand and investment will drive Greek economic expansion to an annual 4.1 percent this year from 4.3 percent in 2006, the European Commission estimated on November 9. The country’s -214 billion ($314 billion) economy has grown for 14 consecutive years, the longest period of continuous expansion since the 1960s, as falling interest rates and EU funds boosted spending and investment. EU report Separately, Economy and Finance Minister Giorgos Alogoskoufis noted at a press briefing on the results of the European Union economy and finance ministers council (Ecofin) in Brussels on Tuesday that the Commission’s autumn report on the economies of member states has lowered growth forecasts for all member states except Greece, compared to the spring report. He said this reflected the dynamism of the Greek economy. Alogoskoufis said after the successful lowering of the country’s fiscal deficit below the EU-mandated 3 percent of gross domestic product, the second phase of fiscal consolidation will not concern only the central government but will include the broader public sector. This will have beneficial effects on the country’s growth potential and in further trimming the public deficit, he added. The economy minister said the 2008 budget bill which will be tabled in Parliament on November 20 will be little changed from the already published draft. Thereafter the government will present the draft bill on the third phase of tax reform. The budget draft provides for a lowering of the fiscal deficit from a projected 2.6 percent this year to 1.8 percent of GDP in 2008. Responding to questions, Alogoskoufis denied rumors that the government was preparing to levy a «green» energy tax, starting from big cars. «We are planning to impose no green tax,» the minister said. (Bloomberg, Kathimerini)