Greece's economy shrank 2.6% in Q4, down from 3% in Q3, contracted 3.7% in 2013, its sixth straight year of recession; economists say slower Q4 contraction is positive sign, may signal expansion in 2014

WASHINGTON , February 17, 2014 () – Greece’s economy contracted less than economists expected in 2013, a sign that the country is set to expand for the first year since 2007.

Gross domestic product declined 2.6 percent in the three months through December from the same period last year, its 22nd straight contraction, after dropping 3 percent in the previous quarter, the Athens-based Hellenic Statistical Authority said in an e-mailed statement today. The economy shrank 3.7 percent in 2013, compared with a drop of 6.4 percent in 2012, according to Bloomberg calculations.

“The fourth quarter number is very positive,” said Ilias Lekkos, chief economist at Piraeus Bank SA in Athens. “The trend throughout 2013 of the recession getting shallower creates a positive dynamic, which allows us to expect stabilization and even some growth in 2014.”

Greece’s 2014 budget estimated that the economy contracted 4 percent last year and will return to growth this year, expanding 0.6 percent. The country’s six-year recession, deepened by budget cuts tied to 240 billion euros ($329 billion) of bailout loans from the euro area and International Monetary Fund, sent the unemployment rate to a record 28 percent in November and has cost Greece about a quarter of its GDP.

A gauge of Greek manufacturing expanded in January for the first time in 53 months and retail sales were unchanged from a year earlier in November, the first time since June 2010 they didn’t drop, adding to signs of a possible Greek recovery.

Greece’s consumer price index, calculated using a national measure, dropped 1.5 percent in January from a year earlier, according to separate statement from the statistics agency. The agency will release the European Union-harmonized January consumer price index on Feb. 17.


--With assistance from Mark Evans in London. Editors: James Hertling, Jana Randow


To contact the reporters on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net; Eleni Chrepa in Athens at echrepa@bloomberg.net


To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net; Jerrold Colten at jcolten@bloomberg.net

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