GDP shrank by 6.8 percent in 2011

The country’s gross domestic product contracted in 2011 at a particularly steep rate of 6.8 percent, the highest on record, following three years of recession and beating even the most pessimistic of official expectations.

The data for the last quarter of 2011, released on Tuesday by the Hellenic Statistical Authority (ELSTAT), showed a 7 percent decline in GDP on an annual basis, worse than any of the forecasts issued by the government or Greece’s official creditors.

This serves to quantify the problems that the market has been facing over the last few months, with the drop in industrial production, retail commerce and construction being the main factors behind the contraction. It also serves to explain the soaring of official unemployment to over 20 percent of the work force.

Worse still, with the measures the government has just agreed to for the containment of public spending and the reduction of salaries in the private sector, there are hardly any grounds for anyone to claim that the economy will be able to post even a minimal rebound this year. Preliminary estimates for 2012 and 2013 already point to a 4 to 5 percent contraction, continuing the cycle of GDP shrinkage that started in 2008.

ELSTAT data show that industrial production posted an 8.4 percent drop in 2011 compared with the year before, with manufacturing output dropping by a whopping 9.5 percent and many factories closing down.

Retail commerce turnover dropped in the January-November 2011 period by 6.8 percent annually, ELSTAT said, while sales volumes fell by 9.9 percent in the same period, reflecting the major slump in consumption.

Construction volume in the first 10 months of 2011 fell by 37.6 percent year-on-year while new permits declined by 28.7 percent over the same period. Even in tourism there was a decline in the accommodation turnover by 1.2 percent in the third quarter of 2011 compared with the same quarter in 2010.

The only positive development was in exports, which grew by 9.7 percent in 2011 compared with the year before, while imports contracted by 13.1 percent. 

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