Greek industrial output down again, but hopeful signs

Greek industrial output down again, but hopeful signs
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Greek industrial output recorded its steepest decline in 16 months in July.

There were falls in production of electricity, mining and manufacturing.

The statistics service said output was down 8.1 percent from July last year.

However, one big factor was mild summer temperatures which reduced the need for air-conditioning. That pushed down electricity production by a fifth.

And analysts said that for the first seven month the sector has performed better compared with last year.

Industrial output is usually volatile with monthly figures subject to sizeable revisions. But Greece’s economy is in its sixth straight year of recession, expected to contract about 4.2 percent in 2013.

Output shrank 0.2 percent in the seven-month period compared to a 6.7 percent contraction in the same period a year earlier.

In addition, the latest Purchasing Managers Index manufacturing indicator released last week showed the sector contracted at its slowest pace in more than three years in August, fuelling hopes that its long slump may be bottoming out.

Deflation takes hold

At the same time it was announced that consumer prices continued to deflate due to wage cuts amid a deep recession.

In August there was a 1.3 percent decline in prices, from a year earlier. That followed a drop of 0.7 percent in July.

An internal devaluation process is underway that experts say could render the country’s economy more competitive.

Falling wages took time to be transmitted to lower consumer prices despite the economic slump. Greece’s EU/IMF lenders have attributed the relatively slow pace of price declines to inadequate product market reforms.

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