A man buys cherries in Monastiraki in downtown Athens on July 14, 2015.
In a boost for Prime Minister Alexis Tsipras’s leftist government, revised data also showed that Greece posted no growth or decline in economic output in the first quarter instead of a previously reported 0.2 percent contraction.
Eurozone finance ministers are due to meet in Brussels on Friday to sign the new bailout package, which is now under discussion in the Greek Parliament. Reports continue to suggest that one of Germany’s key objections to the deal is the absence of the International Monetary Fund, something that could only be rectified with some kind of debt relief for Greece.
The Greek government defended its new bailout program as tough but essential to avoid the nation’s financial collapse, as it faced a rebellion in parliament ahead of a vote on the deal later in the day.
Analysts believe the growth figure was driven by tourism – with flocks of people flooding to the Greek islands for a cheap summer holiday – and a better performing industrial production sector.
Tsipras has said Syriza will hold a special congress after the summer to debate its differences.
Capital controls which were imposed on 28 June prevented Greek citizens from withdrawing any more than the daily limit of €60. “This explains the surprising second quarter GDP reading”.
These capital controls have hampered business activity and it is expected that they will have constrained economic growth in the third quarter.
“The high debt to GDP and the gross financing needs resulting from this analysis point to serious concerns regarding the sustainability of Greece’s public debt”, said the analysis, adding far-reaching reforms were needed to address the worries. There’s also an ominous signal from the European Commission’s sentiment indicator, which is back at its lowest level in nearly three years. Their economy is growing after all the Greek Drama?