Greece Just Witnessed Something It Hasn’t Seen Since 2006
Greece’s economy expanded for a third straight quarter for the first time in more than a decade, providing a foundation for the country’s attempts to exit its bailout program next year.
Gross domestic product grew 0.3 percent in the three months through September after expanding a revised 0.8 percent in the previous quarter, the Hellenic Statistical Authority said in a statement on Monday. From a year earlier, GDP grew 1.3 percent.
Greece’s government and representatives of the country’s creditor institutions on Saturday agreed on a set of economic overhauls the country must undertake in exchange for fresh loans. The payout, supplemented by more bond market forays next year, will help the government build a cash buffer as it seeks to prepare for its bailout exit when the current program expires in August 2018.
While the third straight quarterly expansion provides some economic stability as the government tries to make a clean break from its bailouts, the slowdown in the pace of growth compared with the second quarter will make it harder to hit its 1.6 percent full-year growth forecast this year.
“To reach the 1.6 percent growth target for 2017 as a whole, the Greek economy would now have to expand by 1.2 percent over the last quarter of the year,” said Bloomberg economist Maxime Sbaihi. “That’s too high a bar: an expansion of half that pace is more likely in the fourth quarter. It would bring the annual growth rate to 1.4 percent only — closer but still below the goal.”
The third-quarter expansion was led by 5 percent boost in exports, including a 9.8 percent increase in service exports, which includes the country’s crucial tourist sector. Consumption fell 0.1 percent, while investment decreased 6.1 percent in the quarter.