Greece’s economy contracted at the start of the year, a result that could further weigh on the wider euro zone’s data after Germany suffered a recession.
(Bloomberg) — Greece’s economy contracted at the start of the year, a result that could further weigh on the wider euro zone’s data after Germany suffered a recession.
Gross domestic product between January and March fell 0.1% from the previous three months, retracing after the fourth quarter’s 1.1% expansion, the Hellenic Statistical Authority said Wednesday. All three economists surveyed by Bloomberg had anticipated growth.
The contraction hit Greece because of a drop in investment that offset higher consumer spending and exports.
The underperformance follows figures last month showing Germany endured a recession between October and March in the wake of Russia’s invasion of Ukraine. The 20-nation euro area reports final first-quarter data on Thursday, with analyst estimates for zero growth suggesting it can escape the fate of its biggest economy.
For Greece, the outlook still looks rosier for this year. The European Commission last month more than doubled its economic growth forecast for 2023, to 2.4%.
Markets see Prime Minister Kyriakos Mitsotakis being comfortably re-elected on June 25 after initially falling just short of an absolute majority.
A strong mandate would allow him to continue on the reform-minded and fiscally responsible path he embarked on since taking power in 2019. That’s feeding hopes Greece can regain the investment-grade status it lost 13 years ago.
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