According to the Commission, fiscal consolidation and strengthening of competitiveness in Greece have improved the climate of confidence and boosted economic recovery.
The European Commission reported that recession slowed down to -2.6 percent in the fourth quarter of 2013 from -5.5 percent in the first quarter of 2013. The strong rebound in tourism, since last spring, had a positive impact on the economy, it added.
Overall, recession in 2013 is expected to slow down to -3.7 percent against a -4.0 percent Commission forecast.
The report noted that economic recession continued slowing in the second half of 2013, with the economy shrinking by 2.6 pct in the fourth quarter after shrinking by 5.5 pct in the first quarter of 2013, as a strong recovery in tourism had a positive impact on the economy. The Greek economy is expected to shrink by 3.7 pct in 2013, down from the Commission’s previous estimate for a -4.0 pct decline. The report said that the economic confidence index continued growing in January, supported by a strong performance in services and retail commerce, while the purchasing power index surpassed the 50-point level for the first time since August 2009. A bank recapitalization process and fiscal consolidation will also have a supportive role in achieving a 0.6 pct economic growth rate this year.
The European Commission, however, noted that private consumption will continue falling, along with available incomes in the country. The report said it expected the Greek economy to gain more ground in 2015 thanks to investments and structural reforms, while a recovery in Eurozone economy was expected to boost Greek exports, shipping and tourism. Greek unemployment is expected to reach 27.3 pct in 2013, with the unemployment rate expected to fall to 26 pct this year and 24 pct in 2015. The consumer price index fell by 0.9 pct in 2013 and was projected to fall by 0.6 pct in 2014, reflecting weak domestic demand, a decline in the unique labour cost and reforms in product markets. The Commission forecasts a slight increase in consumer prices, by 0.2 pct in 2015.
Greece’s fiscal deficit is projected to fall to 2.3 pct of GDP in 2013, to 1.8 pct in 2014 and to 1.6 pct in 2015, helped by a boost in exports and a recovery in imports. However, the Commission noted there were still risks associated with deviating from agreed policies, undermining confidence, investments and exports. The Commission noted that these risks needed to be reassessed. The report noted that the country’s fiscal situation is improving, while the country’s public debt is estimated to rise to 177.3 pct of GDP in 2013, falling to 177 pct in 2014 and to 171.9 pct in 2015.
Greek Finance Minister΄s announcement
“The Commission’s latest estimates confirmed the government’s forecasts in executing the 2013 budget,” a finance ministry report said on Tuesday. The report noted that “Greece achieved a significant – higher than expected primary surplus in 2013).
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