National Bank: Greece’s recovery on track, boosted by business activity and tourism

Greece’s recovery continues, with GDP increasing by 1.3% year-on-year in the third quarter of the year, for a third consecutive quarter of positive growth, the National Bank of Greece said in a report on Wednesday.

It noted that “it is the first time in 11 years that economic activity has increased three quarters in a row,” and the trend could be can be “explained by strong business activity and an inventory replenishment by Greek businesses” in view of the higher-than-initially-expected demand in the first semester and strong orders for the second half of 2017.

Exports of goods and services recorded a health expansion of 7.8% year on year in the third quarter of 2017, receiving considerable support from strong tourism activity and accelerating GDP growth in the euro area.

Strong import growth of 9.3% year on year in the third quarter in 2017 has been almost exclusively driven by imports of production inputs and fuels and is the main counterpart to the large increase in inventories, it said, contributing 2.2 pps to growth.

The current momentum and positive confidence effects in the last quarter of 2017 “are estimated to bring GDP growth in fiscal year 2017 close to the official forecast of 1.6% year on year, and create a positive carry of about 0.5 pps for GDP growth in fiscal year 2018,” National Bank’s concluded.