Greek Economy Shrank 1.5% in Second Quarter on Austerity Measures

Greece Greek flagGreece's economy shrank 1.5% in the second quarter of the year as the government's austerity program bites.

The country's statistics agency Elstat said the "significant reduction" in public spending contributed to the worsening recession, BBC News reported. The economy contracted 0.8% in the first quarter.

"Economic activity seems to be declining at an accelerated pace due to high uncertainty and the gradual implementation of austerity measures," said Nikos Magginas, an economist at the National Bank of Greece.

The government has unveiled a collection of austerity measures since December of last year in a bid to strengthen the public finances and avoid default. The government has frozen pay for public sector workers and rolled out plans to reform the tax and pensions systems.

Greek GDP has fallen 3.5% in a year, and is expected to decline 4% in 2010, according to estimates from the European Union and the International Monetary Fund.

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GREAT........I wonder how the Germanm citizens feel, after being talked into bailing out Greece? Greece, like the US will not see any sustained improvement until people are taught to be responsible for themselves and that they will have to work to pay for their food...........that simple. Our country grew great by way of the reward system.........the harder you work, the better you can expect your life to be, but that has been trashed by the liberal/socialistic system that tells everyone the Govt will take care of you. It won't work, but will cause a grave crisis that will cause many helpless people to die......Thanks Govt.

August 12 2010 at 1:09 PM Report abuse +1 rate up rate down Reply