Business

Greek economy shrinks a further 1.5%

  • 12 August 2010
  • From the section Business
A trucker on strike holds a Greek flag in front of the Greek Parliament on July 30, 2010 during their protest march in Athens
Image caption Greece's economic troubles have sparked protests and strikes in recent months

The Greek economy shrank by a further 1.5% in the second quarter of the year, Greece's statistics agency has said.

That adds to 0.8% decline in GDP recorded for the first three months of the year, suggesting that the decline in the economy is speeding up.

Greece's GDP has fallen 3.5% since this time last year.

The country has been forced to bring in severe public spending cuts since it sparked a Europe-wide debt crisis earlier this year.

Greece's statistics agency Elstat said the "significant reduction" in public spending had contributed to the deepening of the country's recession.

Economists said they were not surprised by figures, and blamed the "uncertainty" surrounding the government's austerity measures for the falls in GDP.

"Economic activity seems to be declining at an accelerated pace due to high uncertainty and the gradual implementation of austerity measures," observed Nikos Magginas, senior economist at the National Bank of Greece.

The total decline in GDP during 2010 is forecast to hit 4%, according to the European Union and the International Monetary Fund.

A raft of austerity measures has been announced by Greece since December last year.

They include a pay freeze for public sector workers and reform to the tax and pensions systems.

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