Good news for the Greek economy

Despite the main opposition party’s laments over the state of the Greek economy, there are signs that allow us to remain positive. The announcement by the National Statistical Service (NSS) indicates that the economy’s performance has matched its pre-Olympic Games pace. The rise in gross domestic product (GDP) for the first quarter of 2006 is projected at 4 percent, again putting paid to alarmist forecasts of a post-Olympic slump. These upbeat figures should not be ignored, partly because the Greek economy tends to post its worst performance during the first and final quarters, when tourism and construction activity is quieter. Thus we should expect an upturn in the coming months. Secondly, the public sector’s contribution to higher growth is smaller today than it was in the past. It is common knowledge that public investment has declined over the past few years in order to reduce the deficit bequeathed by the PASOK governments, while public works are progressing too slowly to fuel the Greek economy. All of the above observations indicate that it is up to the private sector to sustain the economy’s momentum. The conservative government’s policy of so-called «mild adaptation» has received a vote of confidence from the business sector and this is also reflected in the rise of private investment, which this year increased by 5 percent, compared to a 1 percent decline last year. All this is not to say that the wager with the economy has been won. Positive data should inspire the continuation and acceleration of the government’s structural reform program. The economy requires constant vigilance and frequent adaptation to the challenges posed by globalization.