Brus­sels to cut growth fore­cast

Con­sumer con­fi­dence slides fur­ther as all signs point to re­view de­lay lead­ing to a slower re­cov­ery this year

Kathimerini English - - Focus - BY DIMITRA MANIFAVA

The Euro­pean Com­mis­sion has re­vealed its in­ten­tion to re­vise down­ward its es­ti­mate for the Greek growth rate, fol­low­ing the eco­nomic and po­lit­i­cal in­sta­bil­ity gen­er­ated by con­tin­ued de­lays in wrap­ping up bailout re­view ne­go­ti­a­tions.

Ahead of the pub­li­ca­tion of the spring eco­nomic fore­casts for Euro­pean Union mem­ber-states in May, the Com­mis­sion’s spokes­woman for eco­nomic and mone­tary af­fairs, An­nika Brei­dthardt, said that re­cent data point to smaller growth com­pared with the Com­mis­sion’s lat­est fore­casts in Fe­bru­ary, given the un­cer­tainty that pre­vailed un­til re­cently around the com­ple­tion of the re­view.

Brei­dthardt went on to add that “the frag­ile state of the econ­omy high­lights the need for the com­ple­tion of the re­view at the ear­li­est pos- sible time.” Ac­cord­ing to its win­ter fore­casts, Brus­sels ex­pected Greek GDP to grow by 2.7 per­cent.

The re­duc­tion of GDP ex­pec­ta­tions comes as lit­tle sur­prise, how­ever. A series of data from cru­cial as­pects of the econ­omy have since the start of the year il­lus­trated that the econ­omy will not grow as much as an­tic­i­pated. Af­ter the drop in re­tail com­merce in terms of sales vol­ume, in su­per­mar­ket sales, in con­struc­tion ac­tiv­ity, in ex­ports ex­clud- ing fuel (while the un­em­ploy­ment rate re­mains stub­bornly un­changed at 23.5 per­cent) fresh fig­ures yes­ter­day con­firmed the ad­verse con­sumer sen­ti­ment.

Ger­man re­search com­pany GfK showed that the in­come ex­pec­ta­tions in­dex of Greek con­sumers dropped in end-March to -52.3 points, its low­est level since Oc­to­ber 2012. Com­pared to a year ear­lier, this is a de­cline of seven points, and com­pared to the last quar­ter of 1.0725 2016, it shows a 12-point drop.

GfK also found a drop of seven points in the in­dex mea­sur­ing the in­ten­tion for con­sumer pur­chases: Its read­ing in end-March was at - 44.6 points, which en­tails a greater shrink­ing for the re­tail com­merce to come. In to­tal, the eco­nomic growth ex­pec­ta­tion in­dex read -51 points in March, against -50.6 points a year ear­lier, though there had ap­peared to be a re­cov­ery trend (at -34 points) in end-De­cem­ber.

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