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Greek GDP Nowcasting model update

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Platon Monokroussos

Platon Monokroussos

Real GDP estimates for Q2 2014: -0.3% YoY and +0.8% in Q0Q seasonally adjusted terms
Switch into positive annual growth expected in Q3 2014

This note presents a preliminary estimate of Greek GDP for the second quarter of this year, based on a range of monthly data released up to June 30, 2014. Our Nowcasting model produces high frequency, real-time estimates of Greece’s gross domestic product by applying an econometric methodology that can properly handle data reporting lags, revisions and other important aspects characterizing the daily flow of macroeconomic information.

Our mid-point estimate points to a further slowdown in the pace of annual GDP contraction in the second quarter of 2014 to around -0.3% , from -0.9%YoY in Q1 2014 and -2.3%YoY in the final quarter of last year. This should not come as a major surprise, as the flow of macroeconomic data released year-to-date has been broadly positive, supporting expectations for an ongoing stabilization in domestic economy activity. As we explain in the present document, the flow of macro data pertaining to Q2 2014 will continue in the following couple of months and thus, our Nowcasting GDP estimate for that quarter should be considered as strictly preliminary. All in all, we consider our updated model estimates as being broadly consistent with a switch into positive real GDP annual growth rates from the third quarter onwards and positive growth between 0.5% and 1.0% for the current year as a whole.

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