It turns out Greece’s economy performed much worse than thought in the final three months of last year.
GDP contracted by 1.1 percent year-on-year. An earlier flash estimate made last month was for 0.3 percent expansion.
The economy was 1.2 percent weaker between October and December compared with the previous three months. That is three times the -0.4 percent flash estimate in February.
The quarterly fall came after six months of growth.
Greek GDP revision shows slump at worst in five quarters https://t.co/SO9rJ3H1yY via
mbensass</a> <a href="https://t.co/uqnObmWmcF">pic.twitter.com/uqnObmWmcF</a></p>— Bloomberg Markets (markets) March 6, 2017
“The data revision points to a full-year 2016 real GDP growth of -0.1 percent versus a 0.3 percent expansion suggested by the previous flash estimates,” Eurobank economist Platon Monokroussos said.
The International Monetary Fund recently said the frequent and large revisions of Greek GDP data have made it more complicated to analyse the state of the economy.
The Greek statistics agency said the revisions were because off additional data becoming available on balance of payments in December, turnover in the services sector and employment figures.
ELSTAT (@StatisticsGR) March 6, 2017
Highest growth in the eurozone
At a cabinet meeting held at about the same those dire numbers were released they were not mentioned and Prime Minister Alexis Tsipras was upbeat. He told ministers: “For this year the forecasts are that the Greek economy will show exceptionally high rates of growth after many years of recession, the highest growth in the eurozone.”
Speaking about the delays on a bailout review with Greece’s lenders he said: “It is clear that no matter how they may want to stall negotiations at a technical level, there is no turning back. Greece has already turned a page.”
The review has been delayed for months mainly due to disputes between the European Union and the International Monetary Fund over Greece’s fiscal progress and its resistance to adopting extra austerity and unpopular reforms.
The EU and the IMF expect Greece’s economy to expand by 2.7 percent this year. If the review is concluded soon, the Bank of Greece projects it will expand by 2.5 percent.
The Athens government is keen to show that taxation and pension cuts that came with last year’s 86-billion-euro aid deal will bear fruit and lead to recovery this year.
Recovery will be key to bring down an unemployment rate of nearly 23 percent, the highest in the eurozone, and attain a projected primary budget surplus of 1.75 percent – excluding the money that is used to repay debt – demanded by Greece’s creditors.