Reuters
June 9, 2011
Greece's economy shrank far more than expected at the start of 2011, signaling a second wave of austerity measures prescribed by the EU and IMF will pile even more pain on a fractious society.
Athens submitted its plan for tackling its budget crisis to parliament and success hinges on squeezing revenue out of the economy but sharp downward revisions to first quarter data suggested the mountain the government must climb is even higher than previously thought.
Gross domestic product tumbled 5.5 percent in the first three months of this year, the official numbers showed, far more than an earlier flash estimate of 4.8 percent.
Emilie Gay, an economist at Capital Economics, said that bodes ill for Greek attempts to meet targets for cutting the budget deficit which the international lenders have prescribed.
"We expect the economy to contract by 5 percent this year. For us this means Greece will fail to meet its targets as it did last year," she said.
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