In contrast to its Eurozone peers the Greek economy saw economic growth accelerate in Q3 2018 with GDP expanding by +1% q/q after +0.4% q/q in the previous quarter. On an annual basis GDP growth rose to +2.2% y/y, up from +1.7% y/y in Q2 2018 with stronger private consumption and an increase in inventories more than offsetting a sharp drop in gross fixed capital formation. Meanwhile, net exports made a negative contribution with import growth exceeding that of exports in a sign that domestic demand is strengthening. Recent economic data as well as sentiment indicators – including consumer confidence and the Manufacturing PMI – point to a further strengthening of momentum in the quarters ahead. All in all we stick to our forecast that the Greek economy will grow by +2.5% in 2019 after +2.3% in 2018. Nevertheless, to ensure that Greek growth prospects remain dynamic beyond the short-term, key challenges still need to be tackled including banking sector risk and regaining the trust of long-term investors by sticking to the reform path.
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Weekly Export Risk Outlook 5 December 2018