Bloomberg: Unexpected contraction of the Greek economy – A new blow to the eurozone

The Greek economy contracted in the first quarter of 2023, compared to the last quarter of 2022, and this development could further weigh on the eurozone data, following the recession recorded by Germany, Bloomberg points out.

In particular, Greece’s Gross Domestic Product in the first quarter of 2023 fell by 0.1% compared to the fourth quarter of 2022, after the 1.1% increase it had recorded in the fourth quarter, based on the data provided by published on Wednesday by ELSTAT. All three economists surveyed by Bloomberg had forecast growth.

That contraction was a result of falling investment that offset the country’s higher consumer spending and exports, Bloomberg notes.

These data for the Greek economy follow last month’s data for Germany, which show that it was driven into recession in both the fourth quarter of 2022 and the first quarter of 2023, in the wake of Russia’s invasion of Ukraine.

The prospects of the Greek economy for 2023 are favorable

As for Greece, Bloomberg points out that the outlook still looks more favorable for this year, noting that the European Commission last month more than doubled its forecast for economic growth for 2023, to 2.4%.

Bloomberg concludes by referring to the markets that “see Prime Minister Kyriakos Mitsotakis comfortably re-elected on June 25” as he did not win an absolute majority in the May elections.

And he concludes: “A strong mandate would allow him to continue the reformist and fiscally responsible path he started since taking power in 2019. This fuels hopes that Greece can regain the investment position it lost 13 years ago.”