Monday, 19 February 2018

Economic Relations

The Greek Economy
at a Glance
Eurozone Status: Member
Currency: Euro
GDP 2013: 185.9 billion Euro (at constant prices of previous year).

The Greek economy, having achieved high growth rates until 2008, showed signs of recession in 2009 as a result of the global financial crisis, and from 2010 onwards the recession intensified considerably due to country's fiscal imbalances. The need for consolidation led the country to embark on a trilateral mechanism of financial support, comprised of the EU, the IMF and the ECB. The restrictive income policy and drastic limitation on public expenses during the past four years have had a negative impact on GDP growth, leading to its considerable decrease. For 2014, the Greek economy is expected to return to growth rates of 0.6% (Draft Budget 2014, European Commission).

The reforms and restrictive policy implementations of the last years have already begun to bear positive results. The public deficit decreased by 27.8% in 2010, by 13.2% in 2011, by 37.4% in 2012, and by 66.1% in 2013 compared with the previous year (not including the amounts allocated to the support of banks). A primary surplus of 3.4 billion Euro, according to EUROSTAT, was achieved in 2013. The improvement of the external balance of payments and the negative inflation in 2013 should also be noted. The completion of PSI (Private Sector Involvement) in 2012 reduced the public debt from 170.3% of GDP in 2011 to 157.2% of GDP in 2012 (Eurostat, 2013), contributing in this way to creating a more stable macroeconomic framework. The public debt reached 175.1% of GDP in 2013, because of the support provided by financial institutions in order to improve the liquidity of the Greek economy.

A significant improvement in the development trends of economic indicators is expected this year through the acceleration of reforms aimed at the development of a more attractive investment and business environment, including liberalisation of a number of markets, faster licensing procedures, the Investment Law, flexibility in the labour market, and a reduction in the cost of production factors due to the crisis. It is estimated that starting this year the decrease of GDP will stop and there will be a return of the Greek economy to positive growth (+0.6% in 2014 and +2.9% in 2015 according to the European Commission estimates). 

Major Economic Indicators of 2013   
GDP (Constant prices 2005): -3.9%    
Inflation( Annual Average): -0.9%                                 

Unemployment Rate: 27.3% 
Exports (Goods - Current Prices)*: 27.5 
Imports (Goods - Current Prices)*: 46.9   

*billion Euro     
Source:  Hellenic Statistical Authority, 2014

Last Updated Thursday, 14 September 2017
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