Greek economy shrinks 0.5 percent in first quarter, contraction revised up

ATHENS (Reuters) - Greece's economy contracted in the first quarter at a slightly faster pace than previously estimated, provisional estimates by the Greek statistics service ELSTAT showed on Monday, weighed by weaker consumer spending and net exports. The 0.5 percent decline in gross domestic product from January-to-March, compared to the last quarter of 2015, was steeper than a -0.4 percent flash estimate issued earlier in May, based on seasonally adjusted data. "A slight downward revision of first quarter data does not alter our full-year forecast for a small real GDP contraction," said Eurobank economist Platon Monokroussos. Monday's data also showed Greece's 176 billion euro (133 billion pounds) economy shrank by 1.4 percent on an annual basis in the first quarter, at a faster clip than a previous -1.3 percent estimate. The EU Commission projects Greece's economy will contract by 0.3 percent this year and rebound by 2.7 percent in 2017. Last year it shrank by 0.2 percent. Quarter-on-quarter, consumption declined 0.5 percent in the first quarter with gross capital formation rising 7.5 percent. Imports fell 0.3 percent, while exports decreased by 3.3 percent, the data showed. Economists said gross capital formation recorded positive quarterly growth, driven by a gradual rebuilding of inventories. But all other GDP components contributed negatively to first quarter economic output. "The positive reading in gross capital formation is likely to continue in the current quarter and provide support to total investment expenditure," Monokroussos said. "Looking ahead, the agreement on the first (bailout) programme review may provide room for an improvement in GDP dynamics from the third quarter onwards," he said. (Reporting by George Georgiopoulos; Editing by Tom Heneghan)