Econ­omy con­tracted in 2016 af­ter all

Re­vised Q4 data show GDP fell 0.05 per­cent last year as sev­eral sec­tors per­formed worse than ex­pected

Kathimerini English - - Focus - BY EIRINI CHRYSSOLORA

Op­ti­mists who had es­ti­mated the Greek econ­omy would re­turn to growth from last year were brought back down to earth yes­ter­day as the re­vised fig­ures of the Hellenic Sta­tis­ti­cal Au­thor­ity (ELSTAT) showed that the coun­try’s gross do­mes­tic prod­uct shrank 1.1 per­cent on an an­nual ba­sis in the Oc­to­ber-De­cem­ber pe­riod, lead­ing to a marginal con­trac­tion of 0.05 per­cent for the whole of 2016, against a pre­vi­ous es­ti­mate of 0.3 per­cent growth.

A se­ries of fig­ures were re­vised down­ward to re­flect a more pre­cise pic­ture of the stag­nant re­al­ity. The anal­y­ses of the var­i­ous do­mains il­lus­trate that the hopes of a re­bound had been based on con­sump­tion and not on in­vest­ments, with an­a­lysts ex­press­ing wor­ries about 2017 as its prospects are bur­dened fur­ther by the un­cer­tainty over the bailout re­view.

On a quar­terly ba­sis GDP con­tract- ed a con­sid­er­able 1.2 per­cent, com­pared to the pre­vi­ous es­ti­mate of a 0.4 per­cent con­trac­tion.

The lat­est data have re­futed re­cent es­ti­mates by the Euro­pean Com­mis­sion and the In­ter­na­tional Mon­e­tary Fund re­gard­ing the course of the econ­omy in 2016, as the for­mer had fore­seen 0.3 per­cent growth and the lat­ter an ex­pan­sion of 0.4 per­cent. How­ever, it must be noted that the 2017 bud­get has been based on GDP shrink­ing 0.3 per­cent dur­ing 2016.

The fig­ures came out at a sen­si­tive time for the bailout re­view, and Fi­nance Min­is­ter Eu­clid Tsakalo­tos sought to down­play their im­pact yes­ter­day, say­ing that the course of a sin­gle quar­ter is co­in­ci­den­tal and can­not af­fect the coun­try’s ne­go­ti­at­ing line. Gov­ern­ment sources added that no con­clu­sions should be reached be­fore the fi­nal fig­ures come out next month.

An­a­lysts warn that the omens are neg­a­tive for this year too, given the drop in con­sumer con­fi­dence in the first two months of 2017 and the de- lay in the re­view. Michalis Ma­sourakis, chief econ­o­mist at the Hellenic Fed­er­a­tion of En­ter­prises (SEV), warns that all in­vest­ment de­ci­sions will re­main pend­ing as long as the de­lay in reach­ing a deal per­sists.

Sim­i­larly Tas­sos Anas­tasatos, Eurobank’s deputy chief econ­o­mist, notes that the 2016 GDP re­vi­sion cre­ates a neg­a­tive spring­board for 2017 and, along with the first signs for this year, gen­er­ates reser­va­tions and high­lights the need for the re­view to be com­pleted to lift the un­cer­tainty.

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