Economy growing fast

With Greece againclaiming the fastest-growing economy in the European Union, a mixed bag of economic data appeared yesterday that provided some encouragement to the country’s jobless while showing that state finances remain in trouble. The economy expanded by 2.4 percent in the first four months of the year, easily outpacing the EU average of 0.5 percent, according to Eurostat, the bloc’s statistical arm. Greece’s growth was the highest among the 25 member states. The news counters the doomsayers, who were expecting a sharp drop in growth in the period following the Olympic Games last year. Exports did slump, however, dropping nearly 10 percent. Unemployment data also showed some encouraging signs, slipping in the first quarter to 10.4 percent from 11.3 percent a year earlier. Women still constitute the bulk of the jobless, with 16 percent of females in the work force unable to find work. The unemployment rate among men stood at 6.5 percent. Greece’s economy over the last few years has been one of the strongest in the EU, but governments have been unable to capitalize on this growth as a means of slashing the unemployment numbers. Economists point to structural rigidities, such as the lack of deregulated markets, as being among the factors responsible for keeping unemployment above the 10-percent mark. Economy and Finance Minister Giorgos Alogoskoufis described the economy’s course yesterday as being satisfactory, adding that the positive growth momentum looks set to continue in the next few months. In contrast though, data released by the Bank of Greece yesterday suggest that the government’s budget woes appear likely to continue this year. The state deficit in the first six months of the year reached 6.5 percent of gross domestic product (GDP) or 11.6 billion euros. A 1.5-billion-euro expense for hospitals and a 1-billion-euro capital injection into the Agricultural Bank were responsible for putting the state out of pocket to the tune of more than 2.5 billion euros. The state deficit is not the same as the budget deficit, due to accounting differences, but the figure is considered indicative of the course of government revenues and expenses.

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