The Greek economy contracted in the second quarter for the first time since 1993 as the global recession hit consumption, investments and exports, data showed last week.
Experts said the tourism sector will play a key role in determining the economy’s performance for 2009, describing third-quarter figures on gross domestic product as crucial.
The overall economy declined by 0.2 percent in the second quarter in comparison to the same period a year ago, after a 0.3 percent expansion in the first quarter, according to figures released by the Greek National Statistical Service.
“Economic activity contracted on an annual basis for the first time in the last 16 years, the result of stagnant private consumption and an ongoing slump in private investment and lower income from export services,” National Bank economist Nikos Magginas said.
The economy declined 0.3 percent in the second quarter after a 1.2 percent growth in growth in the first three months of the year.
The growth in the second quarter reflects a fall in imports and the government’s financial stimulus package, according to experts.
The Greek economy has enjoyed a 16 year economic boom but it now faces the risk of protracted slow growth if the government fails to adopt structural reforms to boost competitiveness and correct its fiscal imbalances, the European Union and the International Monetary Fund have said.
Economists point to the need for a new export-oriented growth model for Greece to prosper after the consumption driven growth of the last decade.