Archive for March 2012
On Friday March, 9 the Greek statistical agency announced provisional national accounts data for Q4 2011. Measured in 2005 constant prices, the Greek economy contracted by 7.5% in the last quarter of 2011 driven by a significant reduction in final consumption, both private and public, the free fall in investments by approximately 22% and a slow down by circa 6% in exports. The impact on GDP was partially offset by a substantial decrease in imports by 14.2%.
However, these are not the most worrying signs of this particular release as it was largely expected considering the vice like grip of the austerity measures on the Greek economy. Most concerning are the implications for the first quarter of 2012.
Given the nature of the Greek economy, largely dependant on tourism, economic activity peaks in Q2 and Q3 with the first quarter of each year being the weakest. The drop in economic output has intensified significantly since 2008 with a 10.3% decline in Q1 2009, 9.3% in Q1 2010 and 8.6% in Q1 2011 when compared to Q4 of the previous year. (GDP graph below).