By Alkman Granitsas, Wall Street Journal
ATHENS—Greece’s economy fell more sharply than previously thought in the midst of its five-year debt crisis—at one point plummeting almost 9% in a single year—but has since witnessed a slightly milder recession, according to fresh data from the country’s statistics service.
The revised data, released Friday, show that in 2010—the year Greece received its first international bailout—gross domestic product contracted by 5.4%, compared with a previous estimate of 4.9%, and in the following year by 8.9%. Earlier data had estimated a 7.1% contraction in 2011.
Greece first entered into recession in 2008 amid a world-wide slowdown due to the global financial crisis. But successive waves of austerity measures demanded by its eurozone partners and the International Monetary Fund in exchange for some €240 billion in rescue aid have weighed heavily on the economy. From its peak, Greece’s economy has shrunk by roughly a quarter in size, while unemployment reached a record 28% in September last year. Since then, however, the jobless rate has fallen slightly—to 26.4% in July—as Greece shows the first tentative signs of recovery. Greek GDP is forecast to grow 0.6% this year, and 2.9% next year.
As part of a regular, European Union wide process, Greece’s statistics agency has been revising data from prior years based on new statistical methods that also includes setting a new base year for measuring national accounts. The revision shows that in 2010, the new base year, Greece’s GDP was €226.2 billion, about €4 billion bigger than previous estimates largely due to changes in the way research and development costs, purchases of military equipment, and new home construction are calculated.
As result, the size of Greece’s overall economy was also revised slightly higher in earlier years, but otherwise converges with the previous estimates from 2011 onward.
The new figures show that after the steep decline in 2011, Greece’s economy contracted at a somewhat slower rate in 2012 and 2013. According to the statistics agency, Greek GDP fell by 3.3% last year-compared with a previous 3.9% estimate-and by 6.6% in 2012, versus a previously estimated 7.0% decline.
