Greek recession slows in Q2 but austerity hurting

Greece's severe recession slowed in the second quarter, data showed today, but economists said recessionary pressures would worsen in the second half as new austerity measures bite, jeopardising Athens' ability to meet EU/IMF fiscal targets.

Greek gross domestic product fell 6.9 percent in the second quarter from a year earlier, after contracting 8.1 percent in the first quarter, according to a flash estimate from Greece's national statistics agency ELSTAT.

ELSTAT did not say when it would release seasonally adjusted figures for the second quarter.

Economists said that, although the figures suggested a slight easing in the second quarter, austerity measures were driving Greece's 230 billion euro economy toward a third consecutive year of steep recession, undermining a second rescue programme hammered out by EU leaders in late July.

"While the annual growth rate has become less negative for the second consecutive quarter ... -6.9 percent is still incredibly weak," said Ben May of Capital Economics.