First quarter GDP up 4.3 pct, putting goal within reach

Greece’s gross domestic product grew by a strong 4.3 percent year-on-year in the first quarter of the year, reinforcing the government’s hopes that national output will increase by 3.8 percent this year. Provisional statistics released by the National Statistics Service (NSS) yesterday showed GDP up by 1.9 percent from the previous quarter. «Overall, the first-quarter gain showed that Greece is on track to achieve its target of 3.8-percent GDP growth this year,» said Christos Avramides of Proton Investment Bank. Early this month, Economy and Finance Minister Nikos Christodoulakis even suggested that GDP growth could exceed the original goal. The robust pace in the first quarter of the year was supported principally by the sharp jump in investments and consumer spending. Investment spending rose by 11.3 percent year-on-year and by 10.8 percent quarter-on-quarter, underlining the sizable inflow of community funds and projects related to the 2004 Olympic Games. «The numbers are very good but they do not necessarily reflect robust economic activity,» said Avramides, citing the lack of data on the size of public and private investments. Preliminary indications, however, suggest that the pace of private investments is slowing down, he said. Underpinned by the continued credit boom, consumer spending rose by 3.6 percent in the first quarter of the year, accounting for 2.3 percent of aggregate demand. The rate of growth on a quarterly basis was 0.4 percent. The NSS’s statistics also drew attention to the competitiveness problem faced by Greek products, with the rate of growth in imports surpassing exports for the first time in four years. While imports increased by 6 percent year-on-year based on provisional data, exports went up by just 5.4 percent. The overall picture however is «not that bad,» the Panhellenic Exporters Association (PEA) said yesterday, noting that figures from the NSS and the Bank of Greece were based on different criteria. It said that corrected data showed another story. PEA President Christina Sakellaridi said exports in the first 11 months of 2001 were down by 15 percent instead of 26 percent as originally estimated following revisions. Exports in 2000 actually went up by 1-2 percent, reversing an earlier estimate of a 3-percent decline. Notwithstanding the improved picture, Greek exports in the last decade went up by an average 3 percent annually, against 6 percent for global exports. Sakellaridi said exports to EU countries in the January-November 2001 period fell by 13 percent, offset by a fivefold increase in exports to former Soviet Union countries. An encouraging sign was the growing importance of high-tech products, up 13 times in the last decade. She called on the State to abolish non-essential taxes and promote select products in selected markets as part of a strategy to boost Greek competitiveness.

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