Griekse economie krimpt sneller dan verwacht (en)
With austerity measures and an EU-IMF bail-out now in place, figures show that the Greek recession deepened in the second quarter as GDP shrank by 1.5 percent and unemployment rose to 12 percent.
The GDP contraction of 1.5 percent accelerated in the three months to June after shrinking by 0.8 percent in the first quarter, the Greek statistical office reported on Thursday (12 August). Economists had forecast just a 1 percent quarterly drop.
The statistical office said in a press release the main reasons for the fall was decrease in investments in assets and public spending cuts.
The statistics agency also reported the unemployment rate rose to 12 percent in May from 11.9 percent in April.
The total decline in GDP during 2010 was predicted by the European Union in its spring forecast to hit 3 percent, but the Greek government expects a 4 percent overall decline.
"We think the largest hit to private consumption from tighter fiscal policy is probably still ahead of us," Citigroup economist Giada Giani told Reuters i news agency. "We expect growth to remain negative for the rest of the year, with an average decline of around 3.5 percent for 2010."
Greece agreed in May to reform its tax system and reduce social security programs and public spending in order to receive a €110 billion three-year loan from the EU and IMF designed to help the government make its sovereign debt repayments.
"The measures imposed by the International Monetary Fund and the European Union were expected to impact the economy substantially, so the figures are not a shock even if slightly worse than expected," Diego Iscaro, a senior international economist at IHS Global Insight, told the Wall Street Journal.
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