Greek economy to contract worse than forecast
Greece has today forecast that its economy will contract by up to 3% in 2011 – worse than a previous estimate of 2.6%.
Greece’s finance minister, George Papaconstantinou, said today: “Growth will contract by 4% this year, and next year by between 2.5% and 3%.”
The country has been battling with its spiralling deficit and the country’s Government has introduced tough austerity measures to bring it down.
The Greek Government is aiming to trim the country’s budget deficit from 14% of GDP to 3% by 2014.
However, the measures, which include reducing wages for state workers, trimming retirement benefits, and raising sales, fuel and alcohol taxes, have met with anger and Greece’s two main unions have launched several strikes this year.
The economy is the last euro zone nation to be in recession.
In the second quarter of this year, Greece’s economy contracted for a seventh consecutive quarter after measures to reduce the budget deficit deepened its recession.