The official Greek GDP figures for the first Quarter (Q1) of 2012, published yesterday (8th June), show a slight worsening since the first estimate three weeks ago. The economy shrank by 6.5%, rather than the previous estimate of 6.2%, compared with the same period of 2011. Compared to the peak Q1 of 2008, the fall is 17.44%.
In fact, the Q1 figures for this year are by far the worst for any quarter since the current dataset commences seven years ago, in Q1 2005, and down 9.18% from then (at constant 2005 prices).
But one element of the GDP Q1 calculation leaps out of the pages of the press release from the Hellenic Statistical Authority. This is “compensation of employees”. This total is shown as €14.140 billion, and compares with a 2011 Q1 figure of €16.727 billion, and a Q1 2010 figure of €19.195 billion (all at current prices, i.e. not taking inflation into account).
This means that the “employee compensation” element of GDP (income method) has shrunk by 15.47% compared to the same period of 2011, and by an extraordinary 26.33% compared to the same period of 2010. This collapse in employee compensation largely reflects a reduction in the number of those employed – from 4,440,403 in March 2010, down to 3,843,905 in March 2012 – and the increase in the numbers of unemployed (annual figures for March from the Hellenic Statistical Office):
Other changes to note from the new Q1 GDP figures, compared to Q1 2011: exports up by 1.4%, imports down by 16.6%. Compared to Q1 in 2010, imports are down by a massive 24.76%.
At constant prices, general government expenditure has declined by 13.40% compared to Q1 2010, while household expenditure has gone down by 16.44% compared to 2 years ago. Compared to the same period of 2011, the decline in household spending is 8.54%.