It Took The Bank Of Greece Only Three Weeks To Revise Its 2012 GDP Forecast Even Lower

Tyler Durden's picture

If there is anyone shocked by today's announcement by the Bank of Greece that the country is once again slashing its full year economic forecast by 10%, aside from the IMF of course, please raise your hand. As a reminder, the IMF, whose projections were the basis for the recently released second bailout, and which assume a flat GDP in 2013, somehow has visibility through 2020. Which is more than can be said for the Bank of Greece: its latest forecast of 4.5% GDP decline was made three weeks ago. THREE WEEKS. And it already is being revised. In other news, we look forward to updating the deposit flight out of Greek banks when the most recent monthly update is released shortly, confirming that the local economy continues to be, simply said, dead. A few more such comparable downward revisions, and the Third Greek bailout (Of European Banks), which is due any second now, may be jeopardized (as it will be more difficult to sell to Germans why they are once again bailing out French banks).

From MNI:

Greece is facing yet another year of sharp recession with GDP expected to contract by as much as 5% in 2012, higher than previously forecast, the Bank of Greece said in a report released today.

 

The central bank said the recession would weigh on the ability of Athens to meet its fiscal targets.  

 

The forecast is being revised only three weeks after the central bank's monetary policy report had said the economy would contract by 4.5% this year.

 

Greece has been in recession since 2008, and its GDP contracted by a debilitating 6.9% last year.

"The recession is expected to be close to 5% in 2012, milder than 2011, but only provided that all structural reforms are implemented," the central bank's report said. It attributed its new projection of a bigger contraction to a slump in consumption and productivity, slower overall business activity and a deterioration in the financial sector.

 

The report underlined that there is no time to waste in  implementing the country's economic program, and it urged that after the general election on May 6 the implementation process continue immediately, echoing the fears of Greece's leading European partners that the elections could bring delays.

 

The Bank of Greece conceded that the bigger-than-expected recession in Greece feeds into higher deficits, but argued that it is a mistake to think the strict fiscal discipline is to be blamed.

 

"As long as the vicious cycle of fiscal contraction-recession- uncertainty is being fed, our goal to meet our debt and deficit targets becomes difficult," the bank said. "Some blame it on the current fiscal policy, but this is of course a mistake. Fiscal adjustment affects general demand, but it also affects expectations. And positive expectations could emerge if we shrink the public sector and continue implementation despite political developments."

And some more bad news: more wage cuts are coming. Yes, soon our Onionesque forecast of negative wages will come true...

Apart from reiterating its call for further layoffs in the public sector, the Bank of Greece also said that wages should be cut further in order to boost competitiveness. It added that Greece is still missing structural reforms that could boost productivity, services and the business environment generally.

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SumSUN's picture

Goddam this is one slow train wreck.

GetZeeGold's picture

 

 

So slow they've started selling billboard space on the side of the train.

 

On the bright side.......crushed another record.......with many more to come.

 

......and the Germans get punked.....again.

 

SumSUN's picture


"As long as the vicious cycle of fiscal contraction-recession- uncertainty is being fed, our goal to meet our debt and deficit targets becomes difficult," the bank said. "Some blame it on the current fiscal policy, but this is of course a mistake. Fiscal adjustment affects general demand, but it also affects expectations. And positive expectations could emerge if we shrink the public sector and continue implementation despite political developments."

Who the fuck is the bank of Greece speaking to?

Koffieshop's picture

It's imaginary friends.

icanhasbailout's picture

give us more money Germany... thank you for your war reparations

sessinpo's picture

icanhasbailout                 2369255

give us more money Germany... thank you for your war reparations

 

Comment:

Don't think they are reparations. Nothing is free. Germany isn't paying back anything and if you were a Greek living in their depression, you wouldn't feel like you were being paid back. And again, I must say that the Germans have been wanting to kick Greece out of the EU. The ECB and IMF and private global private banks are the problem. Germany would have been estatic if Greece had declared bankruptcy which should have happened a long time ago.

forrestdweller's picture

the economic death spiral.

soon to be enjoyed in your neighbourhood.

 

Sudden Debt's picture

10% of nothing is still nothing.... just another non event...

 

DavidJ's picture

When will Greece emerge from a depression?  Very scary.

giggler123's picture

They forgot my £1 purchase of greek dried currants last week in their GDP calc..  Gotta be worth something to someone? eh?

Reptil's picture

LOL don't worry too much, they'll be back to 120% debt/GDP....

 

 

 

 

 

 

 

 

in 2078

hedgeless_horseman's picture

 

 

Why are the Krauts bailing out the Frog banks, again?  Because most Europeans are for socializing losses.  It is the privatizing of the gains that befuddles them.

The nations that aren't so dyed-in-the-wool socialist at heart still have their own currencies.

jus_lite_reading's picture

This is beyond absurd now. The real reason they (the Germans) are ignoring this is because all of the PIIGS problems mean a low low FX rate on the EUR/USD and Germany is loving this! 

The German economy is doing BETTER than ever since the Euro inception. So at the loss of the Greeks, the Spaniards, the Irish, the French and yes even the English, Germany sees bailing out the PIIGS for all eternity as the best deal ever... do the math people!!!

Flakmeister's picture

Speaking of GDP growth....

A fantastic article that I strongly recommend; 

http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/

asteroids's picture

There will be NO third bailout.

Zero Govt's picture

Oh Fuck, there goes the Forecast

..but lasting 3 weeks from a Govt Dept is almost old age now, the ink on the ECB banking Stress Tests wasn't even dry before they were in the trash can

Govt : the totally crappest institution ever