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Greece emerged from its 'Great Depression' at start of year

A piglet is hanged outside the finance ministry during a rally by Greek bondholders in Athens October 31, 2014. REUTERS/Yorgos Karahalis

By George Georgiopoulos and Deepa Babington

ATHENS (Reuters) - Greece emerged from a crippling six-year recession as early as the start of the year and has been growing ever since, data showed on Friday.

Seasonally adjusted figures showed the euro zone weakling posted three consecutive quarters of growth this year, even though it had only been expected to exit what the government has called Greece's "Great Depression" in the third quarter.

Earlier quarters were revised using new EU formulas.

The news is a boost for Greece's government, which has been promising austerity-weary Greeks better times ahead. Analysts said it meant the country will probably top its 2014 0.6 percent growth target and improve its swollen debt ratios.

"The figures will certainly help to beat the fiscal and debt targets for this year, although they don’t significantly change the picture for long term debt sustainability," said Diego Iscaro of IHS Global Insight.

Eurobank economist Platon Monokroussos said the latest data combined with the revisions would lower Greece's debt to GDP ratio - expected to hit 175 percent of GDP this year - but only by one percentage point.

Data published on a seasonally adjusted basis for the first time since 2011 showed the 182-billion euro (145-billion pound) economy expanded by 0.8 percent in the first quarter - the first time the economy has expanded since the second quarter of 2009.

It then grew 0.3 percent in the second quarter and 0.7 percent in the third quarter on the back of a strong tourist season. It meant Greece outpaced Germany and France to grow at the fastest rate in the euro zone.

But economists estimate that even if the economy continues to grow as forecast over the next two years, it would only return to about 80 percent of its pre-crisis size in 2007.

Greece sank into recession in 2007 amid a global credit crunch and a heady bout of overspending and borrowing. Since then its economy has contracted for 24 out of the 26 quarters through the end of last year.

A debt crisis and austerity imposed by EU/IMF lenders deepened the recession, wiping out a quarter of the economy, cutting household income by 30 percent, leaving over one in four Greeks unemployed and triggering violent protests.


(Additional reporting by Renee Maltezou and Angeliki Koutantou, writing by Deepa Babington, Editing by Jeremy Gaunt)