Greece out of recession for first time since 2014

A Greek flag flutters in the wind as tourists visit the archaeological site of the Acropolis hill in Athens, Greece. © Ronen Zvulun
The Greek economy has expanded for the second quarter in a row, beating forecasts and emerging from a protracted recession for the first time in two years.

The country’s gross domestic product (GDP) increased by 0.5 percent in the three months to September from the previous quarter, said the Elstat statistics bureau. It follows a 0.2 percent growth in the second quarter. Two consecutive quarters of growth officially mark the end of recession.

The third-quarter growth was 1.5 percent higher year-on-year, the strongest performance since early 2008 when the economy started to contract and had just a brief respite in 2014.

“The readings were clearly above market expectations, pointing to a slightly positive print for the full-year," said Eurobank's chief economist Platon Monokroussos.

"We expect fourth quarter GDP to remain on a positive trajectory, both on a quarterly and yearly basis, with our full-year forecast now standing at 0.1 percent," he said.

According to Greek government estimates, the economy will contract by 0.3 percent in the full-year before returning to growth in 2017 when it is expected to surge by 2.7 percent.

The EU projects Greece’s economy to expand by 2.7 percent next year, while the Bank of Greece forecasts 2.5 percent growth.

The growth dynamic is now in better shape than at any point since the financial crisis, according to the Greek government.

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“The Greek economy has not known a comparable growth rhythm since the first quarter of 2008,” said government spokesman Dimitris Tzanakopoulos.

The positive economic data comes as Greece’s creditors last month released a €2.8 billion tranche from the country’s €86 billion bailout program. The funds were approved after Athens completed the required economic reforms, including tax rises, pension cuts, public asset transfers and the start of a new privatization fund.

Some experts say the economic growth came partly on the back of the EU’s extra funding for Greece to cope with the massive influx of migrants. The country is hosting more than 60,000 refugees and is receiving hundreds of millions of euro from EU.

“The flash readings were above forecasts of around 0.2 percent, showing that the economy did not rely just on tourism but was helped by domestic demand and improved liquidity in the corporate sector amid clearance of arrears,” said Greece’s National Bank economist Nikos Magginas.