Greek premier says economic pain will ease next year

Sat Sep 7, 2013 10:14am EDT
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By Lefteris Papadimas and Karolina Tagaris

ATHENS (Reuters) - Greece's economic pain will ease in 2014 as it exits a recession that will be less acute than forecast this year, helping the country meet its bailout targets, Prime Minister Antonis Samaras said on Saturday.

The country is struggling through a six-year slump that has shrunk its economy by more than a quarter, left more than one in four of the workforce jobless, pushed up poverty levels and shuttered thousands of businesses.

The European Union and International Monetary Fund, which have bailed the country out with two multi-billion euro rescue packages, project gross domestic product will shrink 4.2 percent this year after contracting 6.4 percent in 2012.

But Samaras, addressing an annual trade fair in Greece's second city of Thessaloniki, said the 2013 slump would be "smaller than forecast". He promised Greeks worn down by the country's worst post-war crisis a return to growth next year.

In a speech branded "delirious" by the leftist opposition Syriza party ahead of planned anti-austerity rallies in the city, Samaras said: "This year was the hardest, the most crucial, and it turned out to be the most successful.

"It was the hardest... because Greece paid for all the sins of the past".

In a sign the country's long slump may indeed be bottoming out, data this week showed the economy shrank 3.8 percent in the second quarter, helped by a rebound in tourism. That was the narrowest annual decline in nearly three years.

Greece's lenders expect a return to anemic growth of 0.6 percent in 2014 for an economy that has slumped 23 percent since 2008, while austerity measures have crippled private consumption and unemployment risen to 27 percent.   Continued...

Greece's Prime Minister Antonis Samaras delivers a speech at the annual International Trade Fair of Thessaloniki in northern Greece September 7, 2013. REUTERS/Alexandros Avramidis