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Greek economy grows in Q2 2016

Monday, 29 August 2016 6:39 PM [ Last Update: Tuesday, 30 August 2016 8:45 AM ]

Official figures show the Greek economy grew in the second quarter of 2016 but any prospects for the country to see a strong rebound remains elusive.

The latest figures on the economic performance of Greece show that the country’s economy grew in the second half of 2016 almost a year after it nearly crashed out of the European Union.

Figures showed that the Greek economy had expanded by 0.2 percent in April to June. This was slightly less than a previous estimate of 0.3 percent in what appears to have been a result of weaker consumer spending and net exports.

It was the first quarter-on-quarter expansion since late 2015 and followed a 0.2 percent contraction in the first quarter.

Nevertheless, experts believe that weak demand and scant investment are still preventing Greece from showing a strong rebound after years of recession.

The European Commission and Greece’s central bank project a 0.3 per cent economic contraction this year. This is while the Organization for Economic Co‑operation and Development (OECD) sees a milder 0.2 percent decline

Rating agencies Moody’s and S&P are more pessimistic, expecting the economy to shrink 0.7 percent and 1.0 percent respectively.

Other figures showed that consumption declined 0.2 percent in the second quarter from Q1 and by 1.9 percent year-on-year. Also, imports fell 0.4 percent and exports decreased by 1.0 percent, while gross capital formation increased 1.0 percent from the previous quarter.

The Eurozone finance ministers agreed to give Greece access to a 10.3-billion-euro (11.48-billion-dollar) tranche of bailout funds.

The €10.3 billion is part of the long-delayed second installment of Greece’s third bailout loan, which was agreed on last August and is worth €86 billion ($95.9 billion).

The developments came after the Greek parliament passed a new raft of spending cuts and tax rises in order to unblock the aid, much-needed to help the government repay the country’s debt within the next few months.

The creditors have already granted Greece two bailout loans — one in 2010 and the other in 2012 — worth a total of €240 billion ($272 billion).

An economic crisis hit Greece back in 2009. Since then, the country has witnessed a high unemployment rate and numerous labor protests.

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