Crisis-stricken Greece has fallen back into recession, as the economy contracted by 0.2 percent in the first three months of the year.
Figures from eurostat showed the debt-laden economy was the second worst performer in the 19-country bloc after Estonia. The figures follow a 0.4 percent contraction in the fourth quarter of last year, putting the economy back into recession, Eurostat reported.
The European Commission was forced to slash its yearly growth forecast for Greece to just 0.5 percent this year, from an earlier estimate of 2.5 percent. This projection is still based the country managing to secure a bail-out deal with its creditors and remain in the eurozone.
Greece briefly hit the heights of being the eurozone’s fastest-growing economy in the third quarter of 2014. But falling business confidence, eye-watering unemployment and persistent deflation has seen growth prospects take a tumble since snap elections were called in December.
Flagging growth throws in doubt Greece’s budget targets. The country’s creditors are demanding a budget surplus of 1.2 percent to 1.5 percent of GDP this year. Figures from the rest of the eurozone showed France was the comeback country of the bloc this year. GDP growth was double analyst expectations at 0.6 percent in the first three months of the year.
As a whole, the single currency expanded by 0.4 percent, meeting economist expectations, and hitting a two year high on the back of falling oil prices and monetary stimulus from the European Central Bank.
