ECONOMY

Drop in economic output steeper

Greece’s economy contracted slightly more than initially forecast in the third quarter of the year, according to data released by the National Statistical Service (NSS) yesterday, largely due to a downturn in investment in residences and mechanical and transport equipment. The economy contracted at an annual rate of 1.7 percent in the July-September period after shrinking 1.2 percent in the previous quarter, based on provisional estimates. Quarter-on-quarter, Greece’s 250-billion-euro economy contracted by 0.4 percent in the three months to September. The data was revised from a previous flash estimate published in October, which saw the economy shrinking by 1.6 percent year-on-year and 0.3 percent quarter-on-quarter. «The biggest decrease [in investment] was for residences, by 22.5 percent, mechanical equipment by 21.3 percent, transport equipment by 19.1 percent and other construction by 13.9 percent,» the NSS said in a statement. Greece’s economy is moving deeper into recession as economic conditions in the 16-member eurozone improve. The European Union’s statistics agency confirmed on Thursday its earlier estimate that the eurozone expanded 0.4 percent quarter-on-quarter in the July-September period, after five quarters of falling output. Economists said the provisional figures in Greece show that the fourth quarter is not shaping up to be any better with the economy on course to contract by an average of 1 to 1.5 percent for the year. «Most of the short-term indicators already available for the period point to a further deterioration in activity,» IHS Global Insight economist Diego Iscaro told Reuters. «Tighter fiscal policy, weaker credit growth, large spare capacity levels, and a deteriorating labor market will all continue to weigh down on activity levels during the coming quarters.»