Financial Times
May 13, 2011
Greece’s economy showed marginally positive growth in the first quarter, overturning the finance ministry’s negative first-half forecast and taking analysts by surprise.
The unexpected good news came at the end of a week of fevered speculation that Greece would be forced into an early debt restructuring, with officials from the International Monetary Fund and the European Commission pressing the government to ramp up painful austerity measures and launch a €50bn ($70bn) privatisation programme.
But analysts warned the improvement could be short-lived as Greece’s economy is expected to shrink by 3.5 per cent this year on top of 4.4 per cent in 2010, according to Elstat, the Greek statistics authority.
“This wasn’t expected...It is encouraging, but we’re not out of the woods yet. Domestic demand will remain under pressure,” said Platon Monokroussos, head of markets research at EFG Eurobank.
Gross domestic product rose 0.8 per cent quarter-on-quarter, matching the overall eurozone growth rate, according to flash estimates released on Friday by Elstat. Analysts said a double-digit increase in exports of goods and a strong start to the tourist season had pushed growth into positive territory after nine consecutive quarters of contraction.
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