Greece’s economy shrank in the first quarter at its slowest annual pace since late 2008 when its protracted recession began, data showed on Friday, supporting projections that Athens will emerge from a crippling six-year slump this year.

Gross domestic product, based on seasonally unadjusted data, shrank 0.9 per cent year-on-year, less than a previous -1.1 per cent flash estimate by the country's statistics service Elstat last month.

The GDP reading marked the fourth straight quarter of decelerating economic contraction.

Greece and its international lenders project the battered economy will pull out of recession this year and expand by 0.6 per cent, helped by investments, exports and tourism.

Athens has enjoyed a boost in fortunes in recent months, buoyed by a successful bond sale - its first in four years - and improved market sentiment since nearly crashing out of the euro in 2012.

The pace of the recession weakened sharply last year with the decline in output slowing from 6 per cent in the first quarter to 2.3 per cent in the last quarter, resulting in an annual contraction of 3.9 per cent 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 EU/IMF international 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 per cent slump in household consumption as record unemployment and wage cuts slashed disposable incomes, coupled by a sharp fall in investment. The latest data showed a positive contribution from consumption and net exports.

Consumption rose 0.8 per cent year-on-year but gross capital investment fell 7.9 per cent. Exports grew 5.4 per cent compared to the same quarter last year while imports rose 2.2 per cent.

Reuters