Is Greece’s Economy Actually Healing?
Greece is getting some good economic news to start the week with the country’s primary budget surplus rising more than predicted in June. A rise in tourism was the main driver of the surplus as the struggling country saw receipts for tourism up 21 percent year-over-year, making for a total of 1.59 billion euros in June. For the first half of 2013, this brought the receipts total up to 3.32 billion euros — an increase of 18 percent from the first half of 2012.
What does this mean for Greece? Not much, in all actuality, since the expansive growth in tourism isn’t exactly being accompanied by expansion in other important economic sectors. While contraction did slow to 4.6 percent of GDP in the second quarter from a year earlier, growth is still quite a ways off.
Moreover, the country’s primary budget surplus of 1.6 billion euros, while no doubt a good thing, excludes obligations on existing debt and many of Greece’s entitlement costs. Recession could also continue into 2015, according to Ben May, an economist in London with Capital Economics. May told The New York Times that the numbers were “encouraging,” noting that a 4.2 percent economic decline looks achievable for the remainder of the year, a number that Greece’s lenders have been aiming for.