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Greece just slid back into recession

It’s the first time since late 2013 that the country’s economy has been in decline.

Image: AP Photo/Thanassis Stavrakis

GREECE HAS DIVED back into recession for the first time in over a year.

The country’s economy shrank a smaller-than-expected 0.2% for the first three months of 2015, putting it into a technical recession after a 0.4% drop in GDP for the last quarter of 2014.

It was the first time since the end of 2013 that the country had recorded six straight months in financial malaise, although analysts had predicted an even bigger drop in the latest figures.

Greece Source: Trading Economics

Greece successfully completed another debt repayment to the IMF worth €750 million yesterday as the anti-austerity Syriza government, which came to power in late January, tries to bang out a deal to unlock another €7.2 billion in bailout money.

Those talks with its EU and IMF lenders have centred around what concessions the left-wing government will swallow after vowing to unpick privatisation plans and deep cuts to public services during its election campaign.

It raised another €1.14 billion in short-term bonds today as larger debt repayments continue to loom.

Europe Migrants Summit Greek Prime Minister Alexis Tsipras (right) and European Commission President Jean-Claude Juncker Source: AP Photo/Geert Vanden Wijngaert

Down the road

Another €1.5 billion is due to the IMF next month followed by a massive €6 billion tranche for the ECB in July and August.

It also faces the cash crunch of €1.5 billion in government salaries and pensions owed at the end of the month. This chart shows when the pressure will fall over the next six weeks:

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image Source: TheJournal.ie, Associated Press

Finance Minister Yanis Varoufakis recently warned the country could run out of money within two weeks if no deal was struck.

Greece took a €240 billion bailout but has been struggling under the weight of its massive debt repayments as the national unemployment rate hovers about 25%.

Elsewhere across the eurozone, the latest Eurostat figures showed region-wide GDP grew 0.4% in the most-recent quarter – beating the buoyant economies of both the US and the UK.

- With AFP

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About the author:

Peter Bodkin  / Editor, Fora

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