The seasonally unadjusted data showed the recession - now in its sixth year - eased slightly from the 5.7 percent slump in the fourth quarter of 2012. Analysts polled by Reuters had also projected a 5.3 percent decline in economic output.
Greece has benefited from growing optimism over its future in recent months as fears of a euro zone exit fade, but its underlying economy has shown few signs of a recovery and unemployment remains at a record level of 27 percent.
"The data provides no signal of a bottoming out of the recession," said economist Platon Monokroussos at Eurobank.
"However, the recent bounce in economic sentiment and a strong tourism season are expected to lead to a gradual improvement in GDP dynamics in the coming quarters."
On Tuesday, ratings agency Fitch upgraded its sovereign credit rating for Greece by one notch, citing the country's progress in cutting its budget deficit.
That has helped push bond yields to a three-year low and the stock market also surged to a nearly two-year high on Wednesday.
Data on quarter-on-quarter changes were not provided.
The economy is seen contracting 4.2 to 4.5 percent this year before it starts to recover in 2014, based on European Comission and government forecasts. It slumped 6.4 percent last year.After nearly crashing out of the euro last year and coming under attack for stalled reforms, Greece has won praise in recent months for getting back on track with deficit-cutting goals and pushing through unpopular austerity measures.
Source: Eurostat
(Reporting by George Georgiopoulos and Lefteris Papadimas, editing by Deepa Babington)
Greek PM hails "Greekovery" replacing "Grexit"
ATHENS | Fri May 17, 2013 9:38am EDT
(Reuters) - Greek Prime Minister Antonis Samaras has hailed kinder words from lenders and revived interest in the country's deeply-discounted bonds and stocks as a "Greekovery" to replace last year's "Grexit" catchphrase.
Although there is little sign of economic recovery, Greece is finally attracting some of the cheap funds that are being pumped out by major central banks and feeding an investment boom on stock and bond markets.
Greek bond yields are at a three-year-low and its stock market has hit a two-year high, helped by praise from foreign lenders for government efforts in getting its bailout program back on track.
"Until recently, many analysts believed that Greece was a lost case. We proved them wrong," Samaras said in a speech in Beijing during a trip to China on Friday.
"Most of them now witness not a "Grexit" - an exit from the euro zone - but a "Greekovery" - a recovery of the Greek economy."
The economy, however, remains mired in sixth year of recession with unemployment at a record 27 percent and living standards have sunk due to wage and pension cuts.
"Samaras's 'success story' insults the country's youth, of whom 70 percent are unemployed," George Varemenos, a lawmaker from the main opposition Syriza party, told Skai TV.
Investor interest in Greece revived this week after the Fitch agency upgraded the country's sovereign credit rating to B-minus - still highly speculative - from CCC on Tuesday.
"Steadily Greece convinces more and more that it is on the course of becoming a true success story," said Samaras, who is on a trip to China and Azerbaijan to win business investment and reverse a 20 percent fall in output since the debt crisis began in 2009.
Chinese shipping group Cosco has already made a major investment in Greece's largest port at Piraeus (OLP), which is 74 percent state-owned and is on the government's privatizations agenda.
China is also interested in acquiring the Mediterranean nation's biggest airport in the capital - the Athens International Airport - when the government puts it on sale next year, the Greek finance ministry has said.
But Moody's rating agency still rates Greece as C, near default, while it has just raised emerging manufacturing powerhouse Turkey to investment grade.
Source: Reuters
(Reporting by Renee Maltezou; Additional reporting by Koh Gui Qing in Beijing; Editing by Deepa Babington/Ruth Pitchford)
