Greece plunges deeper into recession

Financial Times
February 15, 2011

Greece plunged deeper into recession in the fourth quarter as household spending slumped and workers stepped up anti-austerity strikes and street protests.

Gross domestic product fell by 1.4 per cent in the three months to the end of December compared with the previous quarter, according to flash estimates released on Tuesday by the country’s statistical authority.

The economy shrank by as much as 4.5 per cent last year – the largest contraction in more than 50 years – as Greece adopted rigorous fiscal and structural reforms to stave off a sovereign default.

Both the finance ministry and the International Monetary Fund had projected negative growth of 4-4.2 per cent in 2010.

In addition, Greece’s central bank gave a bleak forecast for 2011 in its annual monetary report released on Tuesday.

The bank warned the economy would shrink this year by another 3 per cent but added a larger contraction could be ruled out. It said credit growth was likely to be negative in 2011.

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