Greece Stuck In Deep Recession

Greece Stuck In Deep Recession


Austerity measures implemented to cut deficits pushed Greece's economy deep into a prolonged recession in the second quarter, jeopardizing the government's aim of meeting fiscal targets set by international aid donors.
The economy contracted for the ninth straight time in the second quarter, but at a slower than expected pace, preliminary estimates from the Hellenic Statistical Authority showed Monday.
Running for the fifth year, the ongoing recession is hampering the ability of the government to meet its revenue targets and balance its budget.
Gross domestic product declined 6.2 percent from the previous year. The annual decrease was slower than the 6.5 percent fall seen a quarter ago and a 7 percent drop forecast by economists.
The troika, consisting of the European Union, the European Central Bank and the International Monetary Fund will return to Greece early September to resume talks. It will determine whether the country met conditions agreed upon during the formulation of rescue packages and on further payments.
Troika's consent is required at each stage to obtain the EUR 31 billion funding. Greece has pledged a series of economic reforms and spending cuts worth EUR 11.5 billion for 2013 and 2014 to keep the bailout-deal afloat.
The next installment is crucial given the fact that the nation has to redeem EUR 3.2 billion bonds maturing on August 20.
Last month, Prime Minister Antonis Samaras said the economy will undergo a deeper recession this year and will not return to growth until 2014. He expects a 7 percent fall in GDP in 2012.
Deepening recession has taken its toll on the labor market. The unemployment reached a fresh record high in May. There were around 1.15 million unemployed and the unemployment rate was 23.1 percent.
At current prices, GDP slipped at a faster pace of 6.6 percent annually in the second quarter after easing 6.1 percent in the previous three months. The statistical office does not provide a breakdown of GDP with the flash estimate.


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