EC requests more measures while we sink deeper into recession

If anyone wanted to note that in the first quarter of 2011, the GDP increased by 0.8% compared to the last quarter of 2010, which was - historically - the worst in terms of recession, is now not going to be allowed to do so after the data released today by the European Commission and the Hellenic Statistical Authority.

Firstly, the European Commission and Mr. Olli Rehn, the EC’s Finance Commissioner, shoot down the Treasury’s forecasts, as he estimates that our deficit this year will nearly reach double digits, as it is about 9.5% of the GDP, against the 7.5% estimated by the government.

The assessment is included in the EC spring forecast, which states that the recession this year will be even worse, since it will reach 3.5% of the GDP, revised after the EC’s own estimate of 3% of the GDP.

Amounts missing…

All this translates to additional missing billions (almost 5 in public funds and 8 relating to the GDP), which spurred Brussels to send a clear message that we require new measures.

This is all taking place against a stark background of gloomy forecasts on unemployment which will rise over 15% this year, with the debt also launching at up to 166% of the GDP next year.

Despite the forecast, the annual GDP has decreased by 4.8% in the first quarter, which is the second worst performance of the economy since the “unreal” -7.4% of the last quarter.

According to the EC, a positive development is the deceleration of inflation, which will drop from 4.7% in 2010 to 2.4% in 2011 and 0.5% in 2012.

Even that development, though, still means that prices will continue rising this year, before stabilizing - if they do -, in 2012…

Treasury jubilations over the "+0.8%".

The Treasury, however, has found reason to celebrate, as noted in a statement released on the “very positive trend in GDP growth in the first quarter of 2011, compared with the previous quarter, for the first time in nearly nine consecutive quarters of negative rates of change. Based on Treasury projections, this trend had been expected since the second quarter, making ELSTAT’s estimates even more encouraging.

The estimate that “the recession slowdown and positive growth rate in the first quarter indicate a better state of government revenue from now on” follows the same logic.