Growth slows to 1.9 pct in 2019

Greece’s growth rate landed at 1.9 percent in 2019 according to provisional data published on Friday by the Hellenic Statistical Authority (ELSTAT), mainly as a result of weak investment activity.

Sources, meanwhile, say that the adverse scenario formulated by the Bank of Greece for growth this year due to the coronavirus outbreak foresees a rate of growth of 2 percent. The central bank’s baseline scenario puts growth this year at 2.3 percent against a previous forecast for 2.5 percent and the official government forecast for 2.8 percent.

All of this points to a slower rate of growth – albeit significantly higher than in other eurozone state – than had been originally expected, which, if confirmed, will delay the recovery of lost ground from the financial crisis. Of course, the ELSTAT data are not definitive yet and any estimates on the impact of the coronavirus on the Greek economy are anything but certain at this point.

The growth rate slowed down considerably in the last quarter of 2019. It only came to 1 percent from the same period in 2018, while the economy actually contracted by 0.7 percent from the third quarter of the year. Therefore, total gross domestic product for 2019 reached almost 194.4 billion euros. Although this is not far below the official estimate of 2 percent by the government, it did create disappointment as there had been hopes of a better result, based also on the revised estimates by the European Commission for a 2.2 percent growth rate just a month ago.

ELSTAT data show that investments grew by just 0.7 percent last year, though they did rise on a quarterly basis in last quarter by 14.4 percent. Household consumption rose in 2019 by just 0.8 percent year-on-year. Exports of goods and services increased 4.8 percent, mainly thanks to tourism services, and general government expenditure advanced 2.1 percent.

The government said in a statement yesterday that the target of the budget tabled last November has been attained for the first time in the last five years. It also noted that households’ disposable income rose and that part of this increase went toward the rise recorded in bank deposits and to the settlement of tax arrears.