Rise in Greek Producer Prices
The National Statistics Service of Greece has just released an update to the economy’s Producer Price Index (PPI). On a year on year basis this number is now showing at 1.1% following a 0.6% gain the previous month and a market estimate for a contraction of -0.68%.
IOBE, the Greek economic think tank, has published it’s first prediction for economic growth in the economy this year. Following 24 months of contraction the Greek economy is forecast to post a growth rate of 0.7% for 2014 according to the institute, this correlates with the European Union (EU) and the International Monetary Fund (IMF) predictions which both see Greece expanding at a rate of 0.6% this year.
The unemployment target from the IOEB has however been revised to predict a smaller fall in the jobless rate than initially forecast. The initial expectation of a drop in unemployment to 26% has been moved higher to suggest that the actual rate for 2014 will be closer to 26.7%, this is still a fall from the current level of 27.3% but the target will be missed due primarily to a recent round of public sector layoffs prompted by the austerity program.
Following two EU/IMF bailouts the Greek national debt now stands at over 175% of GDP, this highly elevated figure could rise further when the European Central Bank (ECB) performs a stringent stress test on the Greek banking sector later this year, this is set to be the ECB’s most thorough test to date and there is the possibility for an increase in the capital requirement here.
Despite the economic metrics the Greek economy is fundamentally showing signs of health. The large tourism sector is set to bring a much needed boost to the economy this season, estimates are for a €13bn take this year and some temporary relief from the high unemployment situation.
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