13 Aug 2010

Greek economy shrinks further

6:16 am on 13 August 2010

The Greek economy shrank by a further 1.5% in the second quarter of the year.

A decline of 0.8% decline in GDP was recorded for the first three months of the year.

Greece's GDP has fallen 3.5% since this time last year.

The country has been forced to bring in severe public spending cuts since it sparked a Europe-wide debt crisis earlier this year.

The Elstat statistics agency said a "significant reduction" in public spending had contributed to the deepening of the country's recession.

Total decline in GDP during 2010 is forecast to hit 4%, according to the European Union and the International Monetary Fund.

A number of austerity measures have been announced by Greece since December last year.

They include a pay freeze for public sector workers and reform to the tax and pensions systems.