ECONOMY

Recession deepens further in Q3

Greece’s economy shrank by a disheartening 4.6 percent in the third quarter of the year while unemployment soared to 12.6 percent in September, Hellenic Statistical Authority (ELSTAT) figures showed yesterday. The cycle of recession is continuing and the yearly contraction of the country’s gross domestic product is becoming ever more evident in the real economy. Given that the Finance Ministry estimates the slowdown at close to 4.2 percent by the end of the year and that in the first three quarters it came to 3.8 percent, the last quarter of the year is likely to see GDP shrinking by up to 5.5 percent. The growth rate is not expected to recover until the end of 2011 or the start of 2012. Compared with the year’s second quarter, GDP shrank by 1.3 percent in Q3 as the economy continued its decline in September for the ninth month in succession. The sluggishness of the economy is attributed to a 20 percent drop in fixed-capital investment and a 5.5 percent drop in consumption (5.8 percent decline in private consumption and 4.7 percent for the state). There was also a 15 percent reduction in building permits in September from the same month in 2009. Exports declined in the July-September period by 1.1 percent, while imports posted a considerable decrease of 17.8 percent, owing to the shrinking demand for numerous commodities. This meant a further decrease in the trade deficit, which declined by 42.2 percent in the third quarter compared with Q3 2009. In the year to September 2010, a total of 211,349 jobs were lost, with the new unemployed in the market amounting to 170,192. Therefore the jobless rate climbed from 9.1 percent in September 2009 to 12.6 percent in September this year, a level unseen since January 2004. The number of unemployed climbed by 37.4 percent from a year earlier to 627,715. Unemployment among women in particular soared from 13.4 percent in September last year to 16.7 percent this year. The worst-hit age group is 15- to 24-year-olds, for whom the jobless rate reached 33.6 percent in September. The region with the worst rate is Western Macedonia, where 16.3 percent of the work force was without a job in September. To make matters worse, according to 2008 revenue figures, some 19.8 percent of the country’s population is at risk of falling beneath the poverty line – defined as 6,987 euros per person per year or 14,484 euros per year for a family with two children.