TARGETS FAIL, WIN, WHATEVER

Welcome, dear friends, to the 100^th post on LOLGreece. We’ve come quite a way and I’m grateful for your support. As a token of my gratitude I'm not going to do very much but I do promise to tag all of these posts and maybe add some kind of cool tag graphic. Yay!

The big news this weekend were the latest figures from the Greek statistics agency, which reveal that the Greek economy stands on the brink of a death spiral, clocking in at -3.5% growth. Why anyone is surprised, I don’t know. I won’t even bother to say “I told you so” even though I kind of did, because it should have been obvious to anyone paying attention.

Now, for the facts. First, the 3.5% fall is a year-on-year statistic. GDP actually grew by -1.5% in Q2.

Annualise this and you get a much more dramatic number: -6.1%. Or if you’re feeling more generous, annualise the figures from Q1 and Q2 and we’re on track for -4.6% growth this year. Both of these figures are well in excess of the 4% GDP fall anticipated by the EU and the IMF. Which of the three “annual” figures is the more accurate depends on what you think of the momentum of the Greek economic cycle.

My guess from the data so far (see below) is that we’re not halfway there yet and therefore I’m holding out for the worst-case scenario of a -6% growth figure for 2010.

Where does this leave debt to GDP and the deficit? It’s not too hard to approximate. You can get the latest external debt stats here and can approximate the incremental nominal debt in Q2 2010 based on the Q2 2010 change in our budget shortfall, which can be found here.

The result is a lovely linear upward trend, which has brought our debt to GDP ratio to a wonderful 120%, up from 115% in 2009. We're still some way off the forecast 133.2%, but there's always hope.

The verdict is that we're still way behind.