Greek GDP dips nearly a quarter in last five years

THE STRUGGLING Greek economy is still shrinking, but has posted the smallest quarterly fall in two years, according to official figures released yesterday.

 

Between the second quarter in 2012 and the second quarter this year, the embattled Mediterranean nation saw a 4.6 per cent contraction, the shallowest reduction since 2011.

 

The country’s GDP has fallen by nearly a quarter in the past five years, and Greece’s unemployment rate, already the worst in the Eurozone, rose to 27.6 per cent this May.

 

Despite the abysmal state of the economy, the country’s government beat its fiscal target for the first seven months of the year, running a primary budget surplus of €2.6bn (£2.2bn).

 

There is contention over what comes next for the strained economy. German media sources have reported that the Bundesbank expects a new bailout for Greece in 2014, when the current scheme ends. 

 

Although spokesmen from Germany’s finance ministry said that they were not aware of such a report from the Bundesbank, they admitted that it was hard to predict what would happen after next year.  

 

Yannis Stournaras, the Greek finance minister, said that the government’s announcement of a budget surplus was one of the two criteria he had announced in July, which would allow the country to return to bond markets after years of absence. The second, more distant condition was the return of growth.

 

While some countries on the troubled periphery of the euro area may remain in recession for longer, many analysts expect that the currency union as a whole will see some meagre growth in the second or third quarter this year. The currency union’s economy has been contracting since the third quarter of 2012.