The economy kicked off the year 2018 with a strong GDP growth performance of +0.8% q/q in Q1, up from +0.2% in Q4 2017. Compared to Q1 2017, GDP rose by +2.3% – the strongest annual reading in a decade. Net exports were the key driver of growth with exports increasing +9.5% y/y while imports declined by -2.7%. Meanwhile domestic demand proved to be a mixed bag: Private consump¬tion came in at a better-than-expected +1.3% y/y whereas investment disappointed with a decline of -8.3%. The overall Q1 GDP reading is boosting the odds that Greece’s exit from its third bailout and return to international capital markets this summer will be a success and it confirms our 2018 growth forecast of +2.3%. Maintaining the reform momentum, however, remains key to attract long-term investment going forward and in turn to ensure a sustainable economic recovery. Worryingly, the Greek government’s 100-page post-bailout growth plan proves rather short on details, and high hopes that debt relief provided by its European partners will boost growth prospects by itself may be misplaced.
