Greek think tank IOBE sees Greek economy in recession in 2016

[ATHENS] Greece's economy contracted about 0.5 per cent last year, less than previously expected, and will likely stay in recession this year without a strong surge in investment, the country's influential think tank IOBE said in a quarterly report on Thursday.

"The recession in 2015 is projected at around 0.5 per cent, smaller than initially estimated when the economy entered a phase of capital controls," the Foundation for Economic and Industrial Research said in the report.

IOBE's previous forecasts in October had projected a 1.5 to 2.0 recession in 2015.

The milder contraction last year was attributed to strong tourism with cheaper energy costs and a weaker euro helping out on the balance of payments front.

But investment remains a weak spot that will keep the 173 billion euro economy in recession this year as well. IOBE expects the economy's contraction this year will be a bit bigger compared to 2015.

"The weak link in the national output equation, once again will be investment. Growth cannot come before conditions are created for a strong investment wave," IOBE said.

REUTERS