Greece sinks another -1.5%

The Greek economy shrank by a further 1.5% in the second quarter of the year, Greece’s statistics agency has said.

That adds to 0.8% decline in GDP recorded for the first three months of the year, suggesting that the decline in the economy is speeding up.

Greece’s GDP has fallen 3.5% since this time last year.

The country has been forced to bring in severe public spending cuts since it sparked a Europe-wide debt crisis earlier this year.

Greece’s statistics agency Elstat said the “significant reduction” in public spending had contributed to the deepening of the country’s recession.

Economists said they were not surprised by figures, and blamed the “uncertainty” surrounding the government’s austerity measures for the falls in GDP.

“Economic activity seems to be declining at an accelerated pace due to high uncertainty and the gradual implementation of austerity measures,” observed Nikos Magginas, senior economist at the National Bank of Greece.

The total decline in GDP during 2010 is forecast to hit 4%, according to the European Union and the International Monetary Fund.

A raft of austerity measures has been announced by Greece since December last year.

They include a pay freeze for public sector workers and reform to the tax and pensions systems.

BBC News

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

Latest posts by Dean Popplewell (see all)