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Business

Greece slides deeper into depression

Greece's economic decline accelerated in the third quarter as the debt-wracked country's output shrank faster than in the previous three-month period. Gains in the tourism sector couldn't stop the prolonged slide.

Between July and September, Greece's economy contracted by 7.2 percent compared with the same quarter a year ago, according to the latest economic figures released by the Greek National Statistics Office Elstat Wednesday.

In addition, the Elstat data showed that the rate of contraction was higher than in the second quarter of 2012 during which the Greek economy shrank by 6.3 percent.

In the country's vital tourism sector, returns were higher than expected, Elstat said. However, the pick up there couldn't stop what Prime Minister Antonis Samaras has called Greece's "Great Depression," which has slashed the country's economy by 20 percent and has made one in four Greeks unemployed since the crisis began in 2008.

The latest economic data will raise doubts about the government's mid-term fiscal plan. Athens hopes to keep economic contraction to 6.5 percent this year and to 4.5 percent in 2013. A recovery is not expected to begin before the end of 2013, at the earliest, with slight growth of 0.2 percent forecast for 2014.

Economist believe any deepening of the slump will render obsolete plans by Greece's international lenders to reduce the country's huge debt to 120 percent of gross domestic product by 2020.

Conditions for a recovery appear set to worsen in 2013, as the government's budget for the year includes more than 9 billion euros in new taxes and spending cuts.

uhe/kms (Reuters, dpa)