Tobacco Key Factor on Greek Industrial Production

Greek manufacturing shrunk in April and economic growth declined in the first quarter, following a cut in government spending, higher taxes on Kiss,Eva, Karelia, and other smoking brands and a significant decline in investments and consumption in the country.Industrial output fell 5.1 percent in April and economic growth shrunk 1 percent in the three months to March higher than 0.8 percent forecast earlier, indicating a continuing decline in the second quarter, reported the Hellenic Statistical Authority.

Prime Minister George Papandreou last month announced more wage cuts and tax increases on alcohol, fuel and tobacco in return for loans from the EU and the International Monetary Fund to avert a default, which led to frequent protests by unions.

Greece also reported a budget shortfall of 13.6 percent of GDP, the second highest in the EU.

The budget gap fell by 40 percent in the first five months. Government spending fell 9 percent from the first quarter of 2009 and household spending rose 1.5 percent, leading to an overall decline of 0.7 percent, the statistics agency said.

The Greece government expects the country's economy to shrink 4 percent this year.

Here are some key facts from the report:

-- Inflation rate rises to 5.4 percent in May

-- Unemployment touches 12.1 percent, a six-year high

-- Economic sentiment down to 61.9 points in May from 69.1 in April, according to Foundation for Economic & Industrial Research.

-- Trade deficit for January-March down 15.8 percent over same period last year

-- Gross added value down 3.2 percent in Jan-March period

-- Manufacturing declines 5.3 percent in Jan-March period

-- Construction down 24.6 percent in Jan-March period

-- Commerce down 1.9 percent in Jan-March period

-- Other Services decline 2.9 percent in Jan-March period

-- Wages fall 1.2 percent in the quarter.