Econ­omy posts growth in Q2

Fig­ures sur­prise, show­ing Greek GDP beat­ing of­fi­cial ex­pec­ta­tions to ex­pand by 0.9 pct in sec­ond quar­ter

Kathimerini English - - Focus -

Greece’s GDPshowed bet­ter-than-ex­pected growth for the sec­ond quar­ter of 2015, with out­put 1.6 per­cent higher than the same pe­riod last year. An Au­gust 13 es­ti­mate pre­dicted an in­crease in out­put of 1.4 per­cent, ac­cord­ing to fig­ures re­leased by the coun­try’s sta­tis­ti­cal ser­vice, ELSTAT.

The fig­ures rep­re­sent the largest year-on-year in­crease since 2008. The rise has been put down to con­sumer fears of a de­posit hair­cut, brought on by the ref­er­en­dum an­nounce­ment and sub­se­quent cap­i­tal con­trols.

Fear that their sav­ings would lose value if Greece left the eu­ro­zone and re­turned to the drachma also played a role in driv­ing con­sumers to in­vest their money in big ticket pur­chases and con­sumer goods. To­tal ex­pen­di­ture rose 1.1 per­cent and ex­ports grew 0.1 per­cent.

Ac­cord­ing to the data, house­hold ex­pen­di­ture rather than state ex­pen­di­ture was the main con­trib­u­tor to the fig­ures. The ev­i­dence for this comes through fig­ures show­ing in­creased spend­ing on cars, elec­tron­ics, house­hold items and fur­ni­ture af­ter a sig­nif­i­cant down pe­riod.

Year-on-year, car sales jumped by 47.1 per­cent in April 2015, 27.9 per­cent in May and 27.1 per­cent in June. Ac­cord­ing to those in­volved in the field, not only did con­sumers place more or­ders for cars but they paid off their pur­chases much ear­lier than ex­pected, es­pe­cially in May and June.

The elec­tronic goods sec­tor, which had been in con­tin­u­ous de­cline, in­creased 4.2 per­cent in May 2015 com­pared to the same month last year.

In con­trast, year-on-year gross fixed cap­i­tal for­ma­tion fell by 3.3 per­cent in the sec­ond quar­ter of 2015. Ex­ports of goods dropped 4.2 per­cent while ex­ports of ser­vices in­creased by 1.6 per­cent, show­ing tourism prop­ping up the econ­omy once more.

While the sec­ond-quar­ter fig­ures are en­cour­ag­ing, the fore­casts for the full year point to a re­ces­sion. The fig- ures for the third quar­ter are ex­pected to re­flect the full im­pact of cap­i­tal con­trols, the ex­tended bank hol­i­day and in­creased un­em­ploy­ment. Af­ter an ini­tial boom, car sales fell by 23.9 per­cent in July. The re­tail sec­tor in gen­eral is brac­ing for a 30 per­cent loss of rev­enue in 2015.

Greece’s cred­i­tors fore­see the coun­try’s econ­omy con­tract­ing by 2.3 per­cent in 2015 and 1.3 per­cent in 2016 be­fore re­turn­ing to growth in 2017 with a sur­plus of 2.7 per­cent.

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