UPDATE 1-Investments, consumer spending keep Greek economy growing

* GDP expands 0.2% in first quarter

* Annual growth pace slows to 1.3%

* Investments, consumer spending the main drivers

(Adds economist comment, details)

By George Georgiopoulos

ATHENS, June 4 (Reuters) – Greece’s economy expanded in the
first three months of the year after shrinking slightly in last
year’s final quarter, driven by consumer spending and a pick-up
in investments, although a slow-down in Europe made falling
exports a drag.

Gross domestic product expanded by 0.2% in the first quarter
from the last quarter of 2018 when it shrank 0.1%, according to
seasonally adjusted data released on Tuesday by the country’s
statistics service ELSTAT.

On an annual basis, economic expansion decelerated to 1.3%
percent in the first quarter from a downwardly revised 1.5%
clip in the previous quarter.
“The expected mix of stronger investment activity and
private consumption drove growth in the first quarter but net
exports were a drag,” said chief economist at National Bank
Nikos Magginas.

Data showed gross capital formation jumped 7.9% while
household spending rose 0.8% compared to last year’s final

But imports, up 5.0% quarter-on-quarter, outpaced exports
which declined 2.1% and led to a negative overall contribution
to gross domestic product.

“The slowdown in the euro zone began to have an impact on
Greece’s economy, albeit with a lag. Imports accelerated as they
are highly correlated with investment activity,” Magginas said.

Greece’s 180 billion euro economy grew 1.9% last year,
driven mainly by net exports, with private consumption also
providing a boost.

Keeping the recovery on track allowed Prime Minister Alexis
Tsipras to come up with some relief measures this year, which
his party hopes will help close a big gap with the main
conservative opposition ahead of a snap election next month.

In its spring forecasts, the EU Commission projected the
economy would remain resilient and expand by an annual 2.2% this
year. The country’s central bank sees growth remaining at last
year’s pace, around 1.9%.

“As things stand, a 1.9% growth rate looks attainable. A
further boost in private consumption in the rest of the year
could offset downside pressures from external demand and help
reach 2.0% growth this year,” Magginas said.

KEY FIGURES Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018
GDP (q/q, pct) 0.2 -0.1 0.9* 0.2* 0.5*
GDP (y/y, pct) 1.3 1.5* 2.1 1.6* 2.6*
* revised
source: ELSTAT

(Editing by Jon Boyle)

Reuters Messaging:

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