Greece’s recession eases as country nears end to six-year slump

Marcus Bensasson & Nikos Chrysoloras

Greece’s economy contracted at its slowest pace in almost six years, adding to signs that the country is set for a 2014 exit from its deepest recession in half a century as it emerges from its debt crisis.

Gross domestic product declined 0.2 percent in the three months through June from the same period last year, its 24th straight contraction, after dropping a revised 1.1 percent in the previous quarter, the Athens-based Hellenic Statistical Authority said in an e-mailed statement today. The contraction is the smallest since the third quarter of 2008 and beats the median estimate of a 0.5 percent drop in a Bloomberg survey.

“We’ve had a long-term positive trend,” said Christian Schulz, senior European economist at Berenberg Bank in London. “Whether the confidence can be strong enough to push Greece back into strong growth just yet is open to question. I think Greece will probably this year still have to rely on a positive tourist season.”

Greece’s six-year recession has been deepened by budget cuts tied to 240 billion euros ($321 billion) of loans from the euro area and International Monetary Fund, which have demanded a structural overhaul of the economy in return for bailing out the country’s public finances. The slump has cost Greece about a quarter of its GDP and left it with an unemployment rate of 27.2 percent.

Greece’s data isn’t seasonally adjusted and the country doesn’t publish quarter-on-quarter data.

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