Greece leads in growth

Greece was the top performer in the second quarter of the year among European Union member states as its economy roared ahead, leaving other countries in its wake, data from the EU statistics agency Eurostat yesterday showed. Greek gross domestic product (GDP) increased by 4 percent year-on-year even as the eurozone struggled to reach 0.7 percent and the 15 countries in the EU, a notch better, touched 0.8 percent. Greek economic growth came as a result of a 4.2-percent jump in domestic demand, the highest in the EU. A 2.6-percent rise in exports and a 3.7-percent jump in imports also contributed to the expansion. But analysts said Greek growth is expected to slow down in the second half of the year based on economic data released so far. The retail sales index in July and industrial production in the same month showed signs of contraction, figures from the Greek National Statistics Service showed. Nevertheless, domestic demand and public investment spending continued to remain strong and should be able to offset the economic deceleration in the eurozone. The outlook for the eurozone, however, is less than rosy as the European Commission yesterday cut its forecast for the region for the fifth time this year to 0.2-0.5 percent. It said growth would be under 1 percent for the year, the lowest since 1996. The European Central Bank similarly issued a pessimistic forecast, saying the sharp decline in stock prices and surging oil prices are expected to delay an economic pickup in the region to next year. Greece, on the other hand, recently reaffirmed its target of 3.8-percent growth this year. Expansion next year is projected at 4.1 percent and expected to slow to 3-3.1 percent in the event of a war in Iraq.