Greek economy expands in first quarter

Athens: Greece's economy expanded in the first three months of 2017, its statistics service said on Friday, upwardly revising a previous flash estimate in May that showed a 0.1 per cent quarterly contraction.
Data showed the economy grew by 0.4 per cent in January-to-March compared to the final quarter of 2016 when gross domestic product contracted by 1.1 per cent.
The seasonally adjusted data also showed that Greece's economy grew at a year-on-year pace of 0.4 per cent in the first quarter, after contracting by 1.0 per cent in the fourth quarter of 2016, with May's flash -0.5 per cent estimate also revised upwards.
"Τhe readings are better as we had more accurate estimates in the time that has intervened after the flash projections," said a senior official at ELSTAT.
The government, keen to wrap up a bailout review and get more clarity on further debt relief from its official lenders, has downwardly revised this year's growth projection to 1.8 per cent from 2.7 per cent previously.
It expects the recovery to strengthen next year with gross domestic product growing by 2.4 per cent. The EU Commission has also cut its economic growth forecast for Greece to 2.1 per cent growth this year from 2.7 per cent previously.
A recovery will be key to bringing down an unemployment rate of nearly 23 per cent, the highest in the euro zone, and attaining a projected primary budget surplus of 1.75 per cent — excluding debt servicing outlays — demanded by Greece's creditors.
The main drivers behind the rise in first-quarter economic output were stronger consumption and gross capital formation, offsetting a negative contribution from net exports.
Consumption rose 0.4 per cent compared to the fourth quarter, with imports rising by 4.5 per cent while exports declined 2.3 per cent. Gross capital formation jumped 48.3 per cent from the previous quarter.
"Based on this revision, the government baseline scenario of 1.8 per cent full-year growth in 2017 looks pretty attainable," said National Bank economist Nikos Magginas.
"The surprise was that consumption proved more resilient than expected during a difficult quarter marked by uncertainty over the bailout review talks."
Had there been a positive contribution from net exports, we would have seen growth of more than 1.0 per cent in the first three months, he said.