ECONOMY

Growth drops to slowest annual pace since 1993

Greek economic growth slowed sharply in the first quarter of the year, expanding by an annual pace of 0.30 percent, due to a drop in exports and investment activity, according to data made public yesterday. In the first three months of the year, gross domestic product (GDP) grew by the slowest pace since 1993 versus a pace of 2.4 percent in the fourth quarter of 2008, according to provisional figures provided by the National Statistical Service (NSS). Quarter-on-quarter, the economy, about 2.5 percent of the eurozone, contracted 1.2 percent percent. «The significant drop in (Greek) exports and investment contributed to the slowdown in GDP growth,» NSS said in a statement. «Total consumption showed a marginal increase due to public spending and, coupled with a significant drop in imports, had a positive contribution to GDP.» GDP expansion in the euro region dropped 2.5 in the first quarter from the previous three months, the European Union’s statistics office also said yesterday. EU countries are estimated to take in more than half of Greek exports and generate 60 percent of its tourism revenues. The European Commission expects Greece’s 250-billion-euro economy to contract by an annual rate of 0.90 percent this year, the country’s first recession in 15 years. Economy and Finance Minister Yiannis Papathanassiou has stuck to an optimistic January forecast of 1.1 percent growth, underpinned by incentives to support employment, construction and the car industry. Any revision to the growth forecast will be completed in June, according the minister, giving the ministry time to weigh up the performance of the vital tourism industry, which accounts for about 17 percent of the economy. A final figure for GDP in the first quarter will be released by NSS on June 4. Economists said they expect Greece’s economic activity to slow down further in the next two quarters as a result of a contraction in business investment and construction, as well as the adverse conditions affecting export revenues, mainly tourism.