Greece's economy contracted more sharply than expected, by 0.8 per cent in the fourth quarter, and official data today showed downward revisions for the previous three quarters too, spelling a deepening recession.
The fourth quarter contraction was far deeper than the 0.5 per cent forecast by experts and followed a revised fall of 0.5 per cent in the previous quarter. The NSS statistics agency originally put the third quarter fall at 0.4 per cent.
The economy shrank 2.6 per cent on a year-on-year basis following a revised fall of 2.5 per cent in the last quarter of 2009, which had first been put at 1.7 per cent.
Economists said the data suggested Greece's economy shrank by around 2 per cent over last year as a whole, spelling problems for a government plan to cut its spiralling deficit and exit a debt crisis.
"The Greek governement's (growth) forecast is far too optimistic," said Ben May of Capital Economics. "This is going to be another factor making the fiscal adjustment Greece is trying to achieve very difficult.
"The chances are if they do achieve that it's going to lead to a pretty nasty recession," he added.
European leaders sought to prop up Greece with words of support at a summit yesterday but failed to offer concrete proposals to help the country tackle its debt crisis, prompting a negative market reaction.
Greece's socialist government predicts that Greece's €250 billion economy would return to growth in the second half of this year, after plunging into its first recession in 16 years in 2009.
Reuters