Macro roundup: GDP rebounds

Greece's economic output grew an annual 16.2 percent in the second quarter

Greece’s gross domestic product data for the second quarter confirmed the strong economic rebound that was shown in other indicators.

The economy grew 16.2 percent from the second quarter of 2020 — during the height of the first lockdown — and 3.4 percent from the first quarter of this year. While the quarterly rate represented a slight drop off from the 4.5 percent increase in the first quarter, the year-on-year increase was the first since 2019.

As with the first quarter, inventory effects were a major driver of growth last quarter. Gross capital formation grew 21.6 percent from the first quarter, when it grew 19 percent, with the fixed investment component expanding 4.3 percent.

Price pressure

Rising input prices are taking longer to filter through to consumer prices in Greece than elsewhere in the euro area. But it has started happening nevertheless — and done so quite suddenly, now entering the political discourse.

The gap with the rest of the currency area remains large, but as prices elsewhere rise, the Greek index is getting pulled up too. The EU-harmonized inflation rate rose to 1.2 percent from 0.7 percent in July, while the rate calculated using the national measure rose to 1.9 percent from 1.4 percent.

Greece’s EU-harmonized rate remains substantially lower than the euro-area average — which was 3 percent in August — but the increase has reached 2.4 percentage points in just three months.

Hot property

At the end of last year, it looked like the recovery in residential property prices was losing steam. The first half of this year show the market is starting to pick up again.

Bank of Greece data shows that property prices in the second quarter rose 4.6 percent from a year earlier, compared with 3.5 percent in the first quarter. The rise was most pronounced in Athens, where apartment prices rose 6.4 percent.

Other data

  • Industrial production increased 7.8 percent in July from a year earlier. This was led by a 19.8 percent rise in the electricity supply index, with manufacturing increasing 5.2 percent.

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Next week’s key data

Monday, Sept. 13:
  • June building activity (Elstat)

Wednesday, Sept. 15:
  • January to August preliminary budget execution (Finance Ministry)

Thursday, Sept. 16:
  • Second-quarter unemployment (Elstat)

  • July business revenue (Elstat)

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