ECONOMY

In Brief

Industrial output narrows again Greece’s industrial output narrowed for the fourth consecutive month, down 1.8 percent year-on-year in August, hurt by weaker manufacturing, the statistics service (NSS) said yesterday. In the year to August, Greece’s industrial output contracted 3.0 percent compared to the same period a year ago, NSS said. Weaker industrial activity this year is reflected in slowing economic growth. Greece’s economy, about 2.5 percent of the eurozone, decelerated to a 3.5 percent annual expansion clip in the second quarter. Last year it grew 4.0 percent. «Industrial output contraction is due once again to a fall in manufacturing production, specifically to a slowdown in bsectors such as textile, mining, on the back of lower demand from abroad and a worsening of prospects for domestic demand,» said Nicholas Magginas, economist at National Bank. «Manufacturing is expected to continue falling for the rest of the year as the situation in world markets worsens.» (Reuters) Spread in government bonds expands Greek government bond spreads widened to 100 basis points versus benchmark German debt yesterday, the widest spread seen since the introduction of the euro, as risk aversion increased in financial markets. Ten-year Greek government bonds have recently been the highest yielding against Bunds of eurozone member states. Before the onset of the global financial crisis, Greek 10-year spreads were typically around 20 basis points. Similarly, Spanish debt yields, which were around 3 basis points over Bunds two years ago, were around 62 basis points yesterday, Italian yields – 25 basis points over Bunds two years ago – were at 87 basis points yesterday. Greece adopted the euro on Jan. 1, 2001. (Reuters) Cenbank intervention The Romanian central bank said it intervened directly on the currency market, selling 40 million euros yesterday. «The Romanian National Bank made around noon a direct intervention on the currency market by selling around 40 million euros,» central bank spokesman Mugur Stet said in a statement. «The intervention aimed primarily to verify the functioning of the market in the current context of volatility and uncertainty.» (Reuters) Iranian gas Iran’s future natural-gas exports are more likely to be sent east to Asia than west to Europe, an Iranian industry consultant said. «The natural route of gas exports from Iran is east,» said Bijan Khajehpour, chief executive officer of Atieh Bahar Consulting and managing director of Qeshm Energy Co. The growth of energy markets in China and India outstrips that of Europe, Khajehpour said. Iran sees more potential demand there than in Europe, where there is political opposition to Iran, he said. «When you look east, you find a market that is growing much faster,” he said. «You find a market that does not come with political attachments.» (Bloomberg) Cheaper finance Turkey’s government will help provide easier access to lending for small companies hit by the global crisis and a slump in the value of the lira, Finance Minister Kemal Unakitan said yesterday. Officials preparing the 2009 budget, which must be presented to parliament this month, are working on the credit measures, Unakitan said. (Bloomberg)