Athens - With no end in sight to tough talks with its creditors, Greece confirmed fears of economic slowdown by announcing Wednesday that it had slipped back into recession.
The Greek national statistics agency said the economy had contracted by 0.2 percent in the first quarter of this year, according to preliminary data.
The second consecutive quarterly fall in national output, following growth for most of 2014, coincided with a return to political uncertainty in the country and doubt over its 240-billion-euro ($270 billion) international bailout.
Greece's economy had also contracted by 0.4 percent in the final quarter of last year.
Four months of deadlock between Greece's radical Syriza-led government and its EU-IMF creditors over the reforms needed to release a final 7.2 billion Euros in bailout funds has generated concerns Athens is running critically short of cash and may soon end up defaulting, setting off a messy exit from the euro.
"It appears that increasing uncertainty over the progress of negotiations between Greece and its official creditors... Has lately been having a more pronounced effect on domestic economic activity," said Platon Monokroussos, chief economist at Eurobank, one of the top four Greek lenders.
That has led the EU to drop its forecast for Greek growth this year to 0.5 percent from the 2.5 percent it had been forecasting as recently as February.
The EU's economic affairs commissioner, Pierre Moscovici, had already admitted that there was a high degree of uncertainty with the forecast as it assumes Greece will reach a deal with its creditors.
The hard-left Greek government foresees the economy expanding between 0.1 and 0.8 percent this year, according to working documents.
AFP
