Four years after asking international lenders for bailouts that came with attached harsh austerity measures that created record unemployment and deep poverty, Greece’s struggling economy is already showing signs of coming back and gaining strength, the Paris-based Organisation for Economic Cooperation and Development (OECD said.
According to the latest data, the OECD’s composite leading indicators (CLI) for the Greek economy rose to 102.81 points in June, with 100 indicating a long-term growth trend.
CLI are designed to forecast curving points in an economy – either acceleration or a slowdown – six months before this occurs. The CLI stood at 102.71 in May, having been treading above-100 ground continuously since October 2013. This reflects a slowdown in the recession, which shrank 0.9 percent in the first quarter of 2014, year-on-year.
Prime Minister Antonis Samaras, who has stuck to his guns with austerity despite seeing his New Democracy Conservatives and its coalition partner the PASOK Socialists take a hit in the polls, has been touting what he calls a “success story” and recovery, although some indicators are not good and joblessness is still a problem.
The Hellenic Statistical Authority (ELSTAT) this fall will release an initial estimate on the performance of the economy although an initial projection by Eurobank shows encouraging signs and the possibility the GDP will not shrink for the first time in 24 consecutive quarters.
According to Eurobank, most economists polled by Bloomberg forecast a 0.5 percent contraction, while the bank’s chief economist put the figure at -0.3 percent. If it comes in better than that – and positive – that could rejuvenate confidence in the stock market and the rest of the economy, the Eurobank study said.
The study, conducted by academics Andrew Eggers and Alexander Fouirnaies, examines what happens in an economy when the growth rate hovers around zero.