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Greece Sinks in Recession: -6.5% in 1Q 2012

Statistics just confirm what everyone living in Greece experiences each and every day: That economy is deteriorating, that shops close down, people lose their work places,  consummers hardly spend a euro than to cover basic needs and citizens have no money  to pay taxes or even utilities. According to Greek Statistics Authority ELSTAT data released on Friday, Greek Gross Domestic Product shrank by 6.5% in the first quarter of 2012, although it was estimated at 6.2%.

Below a thorough Dow Jones report:

Greece’s battered economy appeared to be lurching even deeper into recession in the second quarter, data showed Friday, a week before new elections that could be crucial for the country’s economic prospects and its future in the euro-zone currency bloc.

Official figures showed factory output falling in April, the first month of the second quarter, and gross domestic product in the first quarter being revised to show a steeper contraction than originally reported.

Elstat, the Greek statistics agency, said industrial production in April fell 2.2% from the comparable month of 2011, after an 8.1% annual drop in March. In month-to-month terms, production in April fell 1.3%.

That suggests the economy is continuing to deteriorate in the second quarter, meaning little prospect of a near-term recovery for the bailed-out country.

Greek gross domestic product shrank by 6.5% in the first quarter, Elstat said in a separate release Friday. That is a steeper fall than the 6.2% it reported in a previous estimate, and follows a 7.5% year-to-year drop in the fourth quarter.

“Recession pressures will remain [at] high levels during the second quarter of the year, because of the high uncertainty regarding the political scene ahead of the new elections and the future position of European leaders,” said Nikos Magginas, senior economist at the National Bank of Greece.

A downturn in tourism–a key part of the Greek economy–and high unemployment will continue to damage demand in the economy, he said.

Former Greek Prime Minister Lucas Papademos said Thursday that the June 17 election must result in a government that is committed to remaining in the euro zone, warning that the fallout from a Greek exit would be disastrous.

 The Foundation for Economic and Industrial Research said its monthly economic climate index fell to 76 points in May from 77.3 in April. (Further reading DowJones via NASDAQ)

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One comment

  1. That high unemployment figure is mostly the young and the private sector. And still every last cent is squeezed out of the real economy to maintain the status quo and consolidating the State. Even Tsipras is now appeasing the civil servants by stating that no sacking will be done. OK, I have to admit he also said something about the other parties not being willing to make the state work more effective and thereby implying SYRIZA will… νομίζω…