ECONOMY

In Brief

Construction activity drops in November Greek construction activity, measured by the number of new building permits, fell 16.2 percent in the 11 months to November, adding to the drag on the economy, the National Statistics Service (NSS) said yesterday. The dive in building activity in the period is a further sign that Greece’s economy, about 2.5 percent of the eurozone’s, is slowing down after growing faster than the eurozone in recent years. The European Commission sees Greece’s economy expanding by 0.2 percent in 2009, at a slower pace than the government’s revised 1.1 percent forecast. NSS data showed building permits fell 21.2 percent in November year-on-year, with 5,318 new permits issued nationwide, corresponding to 1.3 million square meters. (Reuters) Bulgaria starts extending credit lines to banks SOFIA (Reuters) – Bulgaria has started extending credit lines to commercial banks and plans to issue bonds and use European Union funds to boost lending and shield the economy from the global slowdown, Prime Minister Sergei Stanishev said yesterday. Stanishev said the banking sector, 80 percent-controlled by foreign banks, was healthy and stable, but needed support to be able to make loans to businesses. The government, which will put 500 million levs ($330 million) into state-owned Bulgarian Development Bank (BDB) by the end of March, pledged to inject more funds in response to a global crisis that has cut lending and hit economic growth. «It is very important to support the commercial banks. The government is ready to extend more (help) as it has the resources from its fiscal reserve,» Stanishev told reporters. Commercial banks welcomed the move but analysts questioned whether the funds would be enough to protect the economy and spur growth, which they see slowing to 2 percent in 2009 from over 6 percent in the past years. BDB has already contracted credit lines worth 230 million levs with 12 of Bulgaria’s 30 commercial banks. Most of the country’s big banks, like elsewhere in Central and Eastern Europe, are owned by Austrian, Greek and Italian lenders facing tight liquidity in the global downturn. Industrial output Greece’s industrial output contracted for the eighth consecutive month, falling 8.7 percent year-on-year in December, with a sharp drop in manufacturing and mining production, the National Statistics Service (NSS) said yesterday. In the year to December, Greece’s industrial output contracted 3.7 percent compared to the same period a year ago, the NSS said. Weaker industrial output this year is reflected in slower economic growth. «Industrial output slowed to its lowest level in eight years, due to a contraction in most of the manufacturing sectors, as export prospects worsened and domestic demand dropped,» said Nikos Magginas, economist at National Bank. «High inventory levels and the deterioration of the global economy are not expected to allow an improvement of the index for at least the first two quarters of the year.» (Reuters) Turkish growth Turkish estimates for economic growth this year dropped to zero percent from 0.4 percent two weeks earlier, the central bank said yesterday in its biweekly survey of businessmen and economists. Estimates of inflation in 12 months time fell to 7.16 percent from 7.46 percent, the bank in Ankara said. (Bloomberg)