Greek recession drags on, but eases to 4.6%

Recession in the Greek economy eased in the second quarter, official data showed today but some circles are sceptical that the country can climb out of crisis without new help.

The economy shrank by 4.6 per cent compared with contraction of 5.6 per cent in the first quarter, a first official estimate showed.

The latest figure shows that the recession in Greece drags on but that it is less severe on a 12-month comparison, and the government said it was moving into surplus on part of its budget.

This first estimate from the statistics authority comes in the sixth year of recession since the country was overwhelmed by a debt crisis.

The authorities also announced a privatisation deal under a much delayed and scaled-back privatisation programme imposed by creditors.

“According to available data, gross domestic product shrank by 4.6 per cent in the second quarter of 2013 compared with the second quarter of 2012,” the authority said.

Last year the economy shrank by 6.4 per cent from output in 2011.

The government has estimated that the economy will contract by 4.3 per cent this year, but that at the end of 2014 it will show growth of 0.2 per cent.

Yesterday the German weekly publication Der Spiegel, citing an internal document from the German central Bundesbank, reported that Greece might need another rescue programme because it was unable to get on top of the crisis, despite bailout funding from the IMF and EU.

And in a commentary from Capital Economics, economist Ben May said that “the improvement in the economic situation has been much less pronounced than the business surveys had suggested.”

He added that “we are still sceptical that the economy will experience a full blown economic recovery next year, as assumed in the forecasts which underpin the Greek adjustment programme“.