While Prime Minister Antonis Samaras is waiting for international lenders to release a long-delayed $38.8 billion installment, new figures show the country’s economy worsening in the third quarter of this year, with output shrinking 7.2 percent on an annual basis, making it unlikely it will meet fiscal targets to reduce debt and its deficit.
The contraction was deeper than the second quarter’s 6.3 percent drop and follows the passage of a tough $17.45 billion spending cut and tax hike package for 2013-14 that comes with more of the same kind of austerity measures that have plunged the country toward a Depression.
Since 2009, the country’ economic decline – which Samaras has dubbed Greece’s “Great Depression” – has wiped a fifth off economic output and sent unemployment to a record high, putting one in four Greeks out of work. The reading could point to an even grimmer outlook, analysts said, because it was offset by better-than-expected returns from the country’s vital tourism sector, which accounts for a fifth of Greece’s 215 billion euro economy.
The new wave of wage and pension cuts and tax hikes agreed with the country’s international lenders for 2013, coupled with a liquidity shortage, was expected to add to the economic misery, making recovery even more distant. Greece is likely to get two more years to meet fiscal targets but that could require another $40 billion in aid, on top of a first expended rescue package of $152 billion and a second pending one for $173 billion that includes the critical installment.
(Source: Reuters)
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