Greece economy expanded by 1.4% in 2017 after nearly a decade of decline, show the initial data of the National Statistics Office, Elstat. However, the rate of growth is weaker than expected. The outlook for this year is better, with a growth of 2.5%.
Greece fell into financial crisis in 2010 and was forced to accept three international rescue programs. The latter expires in August, after which Prime Minister Alexis Tsipras expects the country to start funding from international markets.
The rescue programs were tied to stringent austerity measures, during which the incomes of ordinary Greeks shrank by a quarter. Following the outbreak of the crisis, the gross domestic product (GDP) of the country fell from 354 billion USD in 2008 to 194 billion USD in 2016.
For the last quarter of 2017, Greece’s GDP is expanding by a minimum of 0.1%, reports Elstat. This represents a slowdown compared to the 0.4% growth in the previous quarter.
“The gross capital formation is the main driver of economic growth, while private consumption remains vulnerable as an example of the still weak balance of Greek households’ balances”, said the National Bank of Greece’s senior economist, Nikos Magginas.
According to Governor of the Central Bank of Greece, Yannis Stournaras, the country will need a precautionary credit line from the European partners after August to preserve investors’ confidence.
Klaus Regling, the head of the Eurozone rescue fund, says it is still “too early” to make a decision on such a credit line. According to him, “does not appear to be necessary” given the current market conditions. Greece will have to “formulate a request and for the moment has clearly stated that it does not intend to do so”, added he.