ATHENS: Greece's economy shrank in the second quarter at its slowest annual pace since late 2008 when its protracted recession began, data showed on Wednesday, supporting expectations that Athens will emerge from the six-year slump this year.
Fresh data released by the finance ministry also showed Athens was well ahead of target for a primary budget surplus - which excludes debt servicing costs - this year.
Gross domestic product, based on seasonally unadjusted data, shrank 0.2 percent year-on-year, with the pace of contraction slowing for the fifth straight quarter.
That topped expectations among economists polled by Reuters, who predicted the 183 billion euro ($244.38 billion) economy would contract by 0.4 percent in the second quarter.
Greece and its international lenders project the economy to pull out of recession this year and expand by 0.6 percent, helped by investments, exports and tourism.
Athens has enjoyed a boost in fortunes in recent months, buoyed by two successful bond sales after a four year exile from markets and improved market sentiment since nearly crashing out of the euro in 2012.
"Although we do not yet have the GDP breakdown, it appears that the improvement in private consumption witnessed in first quarter data continued," said economist Platon Monokroussos at Athens-based Eurobank.
The pace of contraction weakened sharply last year with the decline in output slowing from 6 percent in the first quarter to 2.3 percent in the last quarter, resulting in an annual contraction of 3.9 percent for 2013 as a whole.
ELSTAT does not provide seasonally adjusted quarter-on-quarter data, which most countries use to measure their economic performance.
Hit by austerity policies imposed by European Union/International Monetary Fund lenders who bailed out Greece, the economy has shrunk by almost a quarter over six years, suffering its most protracted recession since World War II.
A key driver of the decline has been a 26 percent slump in household consumption as record unemployment and wage cuts slashed disposable incomes, coupled by a sharp fall in investment.
"We expect a switch into positive year-on-year growth in the third quarter with full-year 2014 growth likely to exceed 0.5 percent," Monokroussos said.
On the fiscal front, the finance ministry said the central government budget had a 2.3 billion euro primary surplus in the first seven months of the year, topping a target of 800 million euros.
The central government surplus excludes the budgets of social security organisations and local administrations and is different from the figure monitored by EU/IMF lenders, but gives an indication of the country's progress in bringing its finances back on track.
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