Recession worst than expected
Greece's gross domestic product contracted in 2011 at a particularly steep rate of 6.8 per cent, the highest on record
Greece's gross domestic product contracted in 2011 at a particularly steep rate of 6.8 per cent, the highest on record, following three years of recession.
The data for the last quarter of 2011, released this week by the Hellenic Statistical Authority (ELSTAT), showed a 7 per cent decline in GDP on an annual basis, worse than any of the forecasts issued by the government or Greece's official creditors.
This serves to quantify the problems that the market has been facing over the last few months, with the drop in industrial production, retail commerce and construction being the main factors behind the contraction. It also serves to explain the soaring of official unemployment to over 20 per cent of the work force.
Worse still, with the measures the government has just agreed to for the containment of public spending and the reduction of salaries in the private sector, there are hardly any grounds for anyone to claim that the economy will be able to post even a minimal rebound this year. Preliminary estimates for 2012 and 2013 already point to a 4 to 5 per cent contraction, continuing the cycle of GDP shrinkage that started in 2008.
ELSTAT data show that industrial production posted an 8.4 per cent drop in 2011 compared with the year before, with manufacturing output dropping by a whopping 9.5 per cent.
Retail commerce turnover dropped in the January-November 2011 period by 6.8 per cent annually, while sales volumes fell by 9.9 per cent in the same period,
Construction volume in the first 10 months of 2011 fell by 37.6 per cent year-on-year while new permits declined by 28.7 per cent over the same period. Even in tourism there was a decline in the accommodation turnover by 1.2 per cent in the third quarter of 2011 compared with the same quarter in 2010.
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