Greece’s ruling SYRIZA party is heading for a bitter split with senior figures trading attacks, as new data reveals the Greek economy defied expectations by expanding 0.8 per cent in the second quarter of 2015.
The Greek national statistics agency also revised a reading of 0.2 per cent negative growth in the first quarter to a flat reading, meaning the economy avoided a recession following a contraction of 0.2 per cent in the last quarter of 2014.
The data came as the Greek parliament approved the country’s third international bailout.
Parliament chief Zoe Constantopoulou criticised finance minister Euclid Tsakalotos,
and Syriza’s youth wing said Greece should leave the eurozone altogether.
The party’s top eurosceptic, Panagiotis Lafazanis, also called for a nationwide anti-austerity movement, drawing a rebuke from the government.
Mr Lafazanis “has announced the early model of a new political group” aiming to take the country back to the drachma, an unofficial government note said.
“This finalises his decision … to take a different road from the government and Syriza,” the note said.
Greece hopes that by quickly adopting the 85 billion euro ($129 billion) rescue plan negotiated with the European Union, European Central Bank (ECB) and International Monetary Fund, it can unlock a first tranche of aid before a 3.4 billion euro ($51.5 billion) debt repayment to the ECB falls due on August 20.
But Syriza hardliners said the proposed accord goes against campaign pledges made by Mr Tsipras, who came to power on an anti-austerity ticket in January.
Syriza’s tough parliament chief Ms Constantopoulou clashed earlier with the finance minister over the emergency procedure demanded by the government to speedily adopt the bailout.
“Do you want to hand the parliament seal to [German chancellor] Wolfgang Schaeuble, [Eurogroup chief Jeroen] Dijsselbloem and [German Chancellor Angela] Merkel?” Ms Constantopoulou said.
SURPRISE GROWTH FOR GREEK ECONOMY
It came as the economic expansion of 0.8 per cent for the April to June quarter was well ahead of analyst expectations of a 0.5 per cent contraction.
The figures showed second quarter growth up 1.4 per cent compared with the same period the previous year.
But according to economists Jamie Murray and David Powell at Bloomberg Intelligence, the “flattering real GDP belies weakness”.
Nominal GDP which is not adjusted for inflation shrank 0.7 per cent in the second quarter, meaning the growth in real GDP was largely due to falling prices, they said, also noting that there could be future revisions.
“One possible explanation for the narrative around the numbers is that the threat of capital controls and their subsequent introduction may have prompted some unusual behaviour,” including Greeks boosting spending before they got cut off from accessing their money, the two economists told Bloomberg.
“Greece’s GDP figures for Q2 brought some rare good news, but they relate to an entirely different economy than the one currently being strangled by capital controls,” economist Jonathan Loynes at research firm Capital Economics said.
“But the figures do not change our view that the economic assumptions built into the bailout plan are likely to prove far too optimistic.”