Greek economy gains ground in first quarter, growth in sight

The Greek economy did markedly better than expected in the first quarter of this year, shrinking by 0.9 percent over a year instead of 1.1 percent estimated in May, the statistics office said on Friday.
The bailed-out and austerity-shocked economy has been in recession for six years, but the latest figures support the government's hopes that this year the economy will switch into growth of 0.6 percent.
That would mark rapid progress, since in the last quarter of last year, the economy showed shrinkage over 12 months of 2.3 percent.
And in the whole of 2013, gross domestic product shrank by 3.9 percent.
The statistics agency Elstat said that the first-quarter performance had turned out stronger than thought because data which had not been available previously had been included in the update.
Exports rose by 5.4 percent on a 12-month basis.
This is important because a trade deficit tends to weigh on growth, but a surplus contributes to expansion, and the eurozone countries which ran into deep trouble are all looking in large part to export-led growth to pull them up
In Greece, the export performance was lifted by a 13.1-percent rise by the services sector, driven by expected record tourist visits this year, for the second year running.
Households have been hit dramatically by the recession, by tax rises and by pension and pay cuts to correct national finances, but even consumer spending turned in a positive figure, rising by 0.8 percent in the quarter.
That was the first such increase for at least two years.
The recession has been easing noticeably since the third quarter of last year.
Extremely high unemployment has began to fall slowly in September last year, and was down to 26.8 percent of the workforce in March, although this is one of the highest levels in the eurozone along with the rate in Spain.
The European Commission estimates that eurozone Greece will emerge from recession this year and will advance to growth of 2.9 percent in 2015, driven by progress on budget stability, competitiveness and confidence which will boost exports and investment.
Next year, investment would take over as the main force in the economy, it said in its recent forecasts.
But the Organisation for Economic Cooperation and Development, a policy forum for 34 advanced democracies,  said in May that Greece will end up with a recession of 0.3 percent this year, but will switch into growth in 2015.
The country was plunged into a deep debt crisis in 2010, two years after the financial crisis broke in the United States, and after Greece revealed that it had falsified growth data.
This propelled Greece into the first rescue in the eurozone which itself was then dragged into a wider debt crisis.
The country was rescued by the International Monetary Fund and the European Union with help totalling 240 billion euros ($327 billion).