Greek recession eases to 4.6 percent in Q2

ATHENS - Agence France-Presse

Tourists eat their lunch at one of the most touristic places in Athens. Greece’s gross domestic product shrank by 4.6 percent in the second quarter of 2013. AFP photo

The Greek economy showed improvement in the second quarter of the year, shrinking by 4.6 percent from 5.6 percent in the first quarter, official data showed on Aug 12.

This first estimate from the statistics authority comes in the sixth year of recession since the country was overwhelmed by a debt crisis.

“According to available data, gross domestic product shrank by 4.6 percent in the second quarter of 2013 compared with the second quarter of 2012,” the authority said.

The latest figure shows that the recession in Greece drags on but that it is less severe on a 12-month comparison.

Last year the economy shrank by 6.4 percent from output in 2011.

The country has been bailed out by the International Monetary Fund and European Union in return for deep structural reforms to its economy, and its banking system is being underpinned by refinancing from the European Central Bank.

The government has estimated that the economy will contract by 4.3 percent this year, but the forecasts for the state budget are based on an assumption that at the end of 2014 the economy will show growth of 0.2 percent.

The budget of the central government, which does not include the cost of interest on the debt, local authority spending and pension budgets, showed a surplus of 2.6 billion euros ($3.45 billion) in the seven months from January to July, Deputy Finance Minister Christos Staikouras said on Monday.

He expressed satisfaction in a statement with what he called “the good results of the central government budget which demonstrates the improving trend of public finances.” He said: “This performance proves that the target of achieving a primary surplus on the general government budget by the end of the year is achievable.” A primary surplus is a surplus excluding the cost of interest on the debt.

Greece hopes to achieve a primary surplus this year in order to begin reducing the public debt of accumulated past deficits, the statement recalled.

However, on Sunday the German weekly publication Der Spiegel, citing an internal document from the German central Bundesbank, reported that Greece might need another rescue programme because it was unable to pull itself out of the crisis, despite bailout funding from the IMF and EU.

The IMF, EU and ECB recently praised progress made on reform of the Greek economy and approved payment of the next slice of bailout funding.