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Latest economic data not playing ball for Greece and its lenders

By Jeremy Gaunt

LONDON (Reuters) - Just as Greece and its international lenders are locking horns once again over the country's bailout and the tasks it needs to carry out to get the money, economic releases are suggesting more tough times ahead for everyday Greeks.

As this graph shows - http://bit.ly/2lKVY1Y - the economy contracted in the fourth quarter at the same rate as it did at the beginning of last year.

Three quarter-on-quarter blips in growth over the period have come to nought - or to be precise, less than nought.

Joblessness has improved. But a drop from 25.8 percent to a leveling off to 23 percent still leaves almost quarter of the workforce unemployed.

Now comes a big jump in consumer inflation, which shot up to a near five-year high of 1.5 percent year-on-year in January.

That may be healthy in that half a decade of deflation has ended, but rising prices will be no comfort to the jobless or to pensioners who have seen bailout-imposed austerity cut their incomes 11 times.

There is, of course, some more positive news.

On an annual basis Greece managed small growth for 2016 as a whole, 0.3 percent, beating earlier projections that saw a 0.3 percent GDP contraction.

On the fiscal front, it also looks set to have outperformed with a 2 percent primary budget surplus, before debt obligations, versus a 0.5 percent target.

But both of those reflect last year as a whole rather than the past few months.

The debate between Greece and its lenders - the International Monetary Fund and the euro zone - meanwhile is primarily about more reforms, and on whether its 2018 bailout target for a primary surplus of 3.5 percent of GDP can be achieved without extra austerity measures.

Whether any of that is doable politically remains to be seen. But the latest Greek data is not exactly helping create a robust background, and the current standoff may further hurt the economy.

(Editing by Hugh Lawson)

 

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