(Athens, Greece) – The first quarter figures have been released, showing that the Greek economy shrank .4% in the first quarter, according to the Hellenic Statistical Authority, also referred to as ELSTAT. It was predicted that the economy would actually shrink by around .5 %, so the figure was a little better than expected. Despite the fact that this figure indicated that the economy was in a period of decline, the figure may indicate that the country could start growing again by the second quarter in 2016, which does overlap peak tourist season in Greece. Many people believe, however, that whether or not Greece will begin to grow in the future depends on whether or not the current bailout talks will end soon.
Greece’s economy has slowed considerably in recent years and has been in the midst of a recession. Despite that, the economy contracted only .3% in 2015, which was a little better than the .5% that most economists had predicted. This was due to an increase in tourism in 2015 despite the influx in refugees making their way to Greece as well as controls placed on Greece’s banks last June in 2015. This year, the EU expects that the Greek economy will contract around .3% this year.
Greece is currently in talks to secure its third bailout deal since 2010. Prime Minister Alex Tsipras is optimistic that this current round of talks will help the Greek economy finally experience a period of growth. Tsipras was re-elected in September of 2015 after promising the people that he would lessen the austerity imposed on the Greek people as part of the bailout packages. The country hopes that the current bailout review will end in May of 2016. Despite the opposition, Greek Parliament recently voted in support of the austerity measures required by the international creditors to complete the bailout review. The current austerity measures include pension cuts, an increase in income tax, and increases in indirect taxes, such as the value added tax, or VAT, which would impact summer tourism. It is hoped that once these bailout reviews are over, the country’s economy will begin to grow once again.