ATHENS, Greece (AP) – Greece’s economy is shrinking at its slowest rate in nearly six years, official figures showed Wednesday, reinforcing hopes that the end of the country’s punishing recession is in sight.
The Statistical Authority said Greece’s economy was only 0.2 percent smaller in the second quarter than it had been a year earlier – the lowest since the third quarter of 2008. In the first quarter, the Greek economy was 1.1 percent smaller, slightly worse than previously thought. The statistics office does not publish quarterly figures.
After six years of recession brought on by the global financial crisis and Greece’s homegrown debt problems, many economists are predicting modest growth in the second half of 2014.
Since the recession started in 2008, Greece’s economy has shrunk by around a quarter, partly because the government had to impose tough deficit-slashing measures, such as spending cuts and tax hikes, to get its public finances into shape in return for international bailout loans from its European euro partners and the International Monetary Fund. Its recession – some refer to it as a depression – is one of the worst to afflict the Western world since the end of World War II.
Capital Economics analyst James Howat said the Greek economy appears to be “slowly emerging from the abyss.” But he warned that recovery remains anemic, particularly within industry and among consumers, despite an expected tourism boon.