Greece’s national output shrank in the second quarter by 6.2 per cent on an annual basis, showing a marginal improvement over the first quarter, according to a flash estimate released by the country’s independent statistics authority, Elstat.
The contraction, based on data that was not seasonally adjusted, came on top of a 6.5 per cent fall in gross domestic product in the first quarter as Greece entered an unprecedented fifth year of recession.
Analysts warned the second-quarter contraction did not necessarily suggest the rate of decline was starting to bottom out after a cumulative output contraction of more than 13 per cent.
“First, it’s a flash estimate that may be adjusted downward later. Second, it’s unlikely the improvement would be maintained given the continuing squeeze on liquidity and an additional tax burden in the third and fourth quarters,” said a private sector economist who declined to be identified.
The coalition government is expected to bring forward some spending cuts from a fresh €11.5 billion austerity package for 2013 and 2014, due to be finalised next week and approved by parliament in September. – (Copyright The Financial Times Limited 2012)
