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September 6, 2013 5:43 pm
The Greek economy contracted by 3.8 per cent in the second quarter, marking the smallest decline since 2010 thanks to a jump in early season tourism and lower trade deficit, according to the country’s independent statistical agency.
The decline was significantly less than the agency’s flash estimate last month of a 4.6 per cent contraction on an annual basis, suggesting that Greece’s six-year recession, the longest ever recorded, may be easing.
The economy shrank by 5.6 per cent in the first quarter bringing the first half contraction to 4.7 per cent on an annual basis.
“I think these latest figures confirm earlier signs the recession is bottoming out,” said Miranda Xafa, a former Greek representative to the International Monetary Fund and chief executive of EF Consulting in Athens.
“But we are not out of the woods yet. … Private consumption and fixed capital formation both showed a further decline, and even if the economy returns to growth the recovery is likely to be “L-shaped”,” she said.
The second-quarter figures were not seasonally adjusted, while Elstat does not publish quarter-on-quarter figures for national output.
The agency said the difference compared with the flash estimate resulted from using new monthly data on imports and exports in June and quarterly data on the labour force and turnover in the services sector.
“In particular, the performance of the accommodation and food and beverage sectors and other service industries was more robust than originally estimated due to a more positive impact of tourism,” Elstat said.“At the same time, the external trade deficit was smaller than estimated at the time of the flash estimate.” .
Tourist arrivals at main Greek airports fell by 9 per cent in April on an annual basis but jumped by almost 20 per cent in both May and June, according to figures from SETE, a private sector tourism organisation.
The trade deficit shrank by 75 per cent compared with the second quarter of 2012, following an 11.8 per cent drop in imports. Exports rose by a marginal 0.9 per cent.
The EU and International Monetary Fund both forecast the economy will shrink by 4.2 per cent this year and show marginal growth of 0.6 per cent in 2014.
Labour minister Yiannis Vroutsas said the labour market was “entering a stabilisation phase” with new hirings outpacing job losses over the first eight months of this year. About 5,300 additional workers were hired in the food and beverage sector in August, when tourist arrivals rose by 10 per cent over the same month last year.
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