Third-quarter GDP data shows dip

Greece’s gross domestic product (GDP) expanded by between 3.0 and 3.1 percent in the third quarter of the year. The National Statistics Service (NSS) is expected to announce the growth rate today for the July-to-September period, with a projected slowdown that will weigh on the average figure for the year. On an annual basis, NSS estimates that growth expanded by about 3.2 percent for 2008, versus the Finance Ministry’s 3.4 percent target rate, as projected in the 2009 draft budget. Meanwhile, NSS is changing the method used to calculate quarterly figures, in order to move in line with Eurostat methods. The changes do not entail any modifications to the calculation of annual data. Consequently, there will be a revision of quarterly growth figures from 2000 until the present. GDP data for the first quarter of the current year will now be revised to 3.3 percent from 3.6 percent previously, while the second-quarter expansion rate will be raised to 3.6 percent from 3.5 percent. Given that third-quarter GDP growth is expected to be around 3.0-3.1 percent, the average for the nine-month period is seen at around 3.3 percent. The slowdown shows that the global financial crisis is starting to bite into the domestic economy. Private construction activity in August fell 19.2 percent in terms of permits issued and 29.2 percent with respect to area built on. Industrial production also fell in September, slipping 3.3 percent in a retreat for the fifth straight month. Forecasts for growth rates in the Greek economy this year are mixed. The European Commission forecasts that Greece’s GDP, estimated at 246 billion euros, will grow by 3.1 percent this year, which appears to be more realistic than the figure projected by the Finance Ministry.