Re­ces­sion, un­em­ploy­ment bite into coun­try’s econ­omy

GDP con­tracts by 6 pct in Q4 of 2012, re­turn­ing to 2001 lev­els

Kathimerini English - - Front Page - BY SOTIRIS NIKAS

The Greek econ­o­my­has dropped back to 2001 lev­els, as in the last quar­ter of 2012 its gross domestic prod­uct amounted to just 40.6 bil­lion eu­ros, ac­cord­ing to Hel­lenic Sta­tis­ti­cal Author­ity (ELSTAT) fig­ures.

Af­ter the 6.45 per­cent con­trac­tion seen in 2012, the government ex­pects GDP to shrink fur­ther by 4.5 per­cent this year, although its in­ter­na­tional cred­i­tors are an­tic­i­pat­ing neg­a­tive growth of 4.2 per­cent. It is uni­ver­sally ac­cepted that the re­ces­sion will con­tinue this year, with some an­a­lysts even ex­pect­ing it to carry on into 2014, although the Fi­nance Min­istry still har­bors some hope the re­bound will start in the last quar­ter of this year.

Of­fi­cial data showed yes­ter­day that fourth-quar­ter GDP in 2012 was re­duced by 6 per­cent from the same quar­ter in 2011, when it had come to 43.2 bil­lion eu­ros.

This is at­trib­uted to four main fac­tors: the un­cer­tainty re­gard­ing the fu­ture of Greece in the eu­ro­zone that pre­vailed in the last quar­ter of last year; the de­cline in in­vest­ment il­lus­trated by the 66.6 per­cent drop in build­ing per­mits in Novem­ber; the con­stant drop in con­sump­tion due to slid­ing dis­pos­able in­comes; and the de­te­ri­o­ra­tion of the trade bal­ance, as ac­cord­ing to sources its ef­fect on GDP in the Oc­to­ber-De­cem­ber pe­riod was neg­a­tive. Although for the whole of the year ex­ports amounted to a record level of 23.8 bil­lion eu­ros, in De­cem­ber they de­clined by 13.4 per­cent from the pre­vi­ous year.

The con­stantly con­tract­ing GDP has had a dra­matic im­pact on the real econ­omy, with un­em­ploy­ment reach­ing 27 per­cent in Novem­ber as the num­ber of the job­less has topped 1.35 mil­lion peo­ple, ac­cord­ing to ELSTAT. Worse still, the fore­casts pub­lished yes­ter­day by the Cen­ter of Plan­ning and Eco­nomic Re­search (KEPE) put the job­less rate at 30.1 per­cent this year from an es­ti­mated 24.6 per­cent last year on av­er­age. KEPE also ex­pects the eco­nomic con­trac­tion to end up at 4.1 per­cent this year.

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