| Date - Field | Greece - Economy - overview |
2012 January
Economy - overview | Greece has a capitalist economy with the public sector accounting for about 40% of GDP and with per capita GDP about two-thirds that of the leading euro-zone economies. Tourism provides 15% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek economy grew by nearly 4.0% per year between 2003 and 2007, due partly to infrastructural spending related to the 2004 Athens Olympic Games, and in part to an increased availability of credit, which has sustained record levels of consumer spending. But the economy went into recession in 2009 as a result of the world financial crisis, tightening credit conditions, and Athens' failure to address a growing budget deficit, which was triggered by falling state revenues, and increased government expenditures. The economy contracted by 2% in 2009, and 4.8% in 2010. Greece violated the EU's Growth and Stability Pact budget deficit criterion of no more than 3% of GDP from 2001 to 2006, but finally met that criterion in 2007-08, before exceeding it again in 2009, with the deficit reaching 15.4% of GDP. Austerity measures reduced the deficit to 10.5% of GDP in 2010. Public debt, inflation, and unemployment are above the euro-zone average while per capita income is below; unemployment rose to 12% in 2010. Eroding public finances, a credibility gap stemming from inaccurate and misreported statistics, and consistent underperformance on following through with reforms prompted major credit rating agencies in late 2009 to downgrade Greece's international debt rating, and has led the country into a financial crisis. Under intense pressure by the EU and international market participants, the government has adopted a medium-term austerity program that includes cutting government spending, reducing the size of the public sector, decreasing tax evasion, reforming the health care and pension systems, and improving competitiveness through structural reforms to the labor and product markets. Athens, however, faces long-term challenges to push through unpopular reforms in the face of often vocal opposition from the country's powerful labor unions and the general public. Greek labor unions are striking over new austerity measures, but the strikes so far have had a limited impact on the government's will to adopt reforms. An uptick in widespread unrest, however, could challenge the government's ability to implement reforms and meet budget targets, and could also lead to rioting or violence. In April 2010 a leading credit agency assigned Greek debt its lowest possible credit rating; in May, the International Monetary Fund and Eurozone governments provided Greece emergency short- and medium-term loans worth $147 billion so that the country could make debt repayments to creditors. In exchange for the largest bailout ever assembled, the government announced combined spending cuts and tax increases totaling $40 billion over three years, on top of the tough austerity measures already taken. Greece, however, struggled to boost revenues and cut spending to meet 2010 targets set by the EU and the IMF, especially after Eurostat - the EU's statistical office - revised upward Greece's deficit and debt numbers for 2009 and 2010. Greece's lenders are calling on Athens to step up efforts in 2011 to increase tax collection, shore up public enterprises, and rein in health spending, and are planning to give Greece more time to repay its EU-IMF loan. Greece responded by introducing major structural reforms, but investors still question whether Greece can sustain fiscal efforts in the face of a bleak economic outlook and public discontent. |
2011 January
Economy - overview | Greece has a capitalist economy with the public sector accounting for about 40% of GDP and with per capita GDP about two-thirds that of the leading euro-zone economies. Tourism provides 15% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek economy grew by nearly 4.0% per year between 2003 and 2007, due partly to infrastructural spending related to the 2004 Athens Olympic Games, and in part to an increased availability of credit, which has sustained record levels of consumer spending. But the economy went into recession in 2009 as a result of the world financial crisis, tightening credit conditions, and Athens' failure to address a growing budget deficit, which was triggered by falling state revenues, and increased government expenditures. The economy contracted by 2% in 2009, and 4.8% in 2010. Greece violated the EU's Growth and Stability Pact budget deficit criterion of no more than 3% of GDP from 2001 to 2006, but finally met that criterion in 2007-08, before exceeding it again in 2009, with the deficit reaching 15.4% of GDP. Austerity measures reduced the deficit to 9.4% of GDP in 2010. Public debt, inflation, and unemployment are above the euro-zone average while per capita income is below; unemployment rose to 12% in 2010. Eroding public finances, a credibility gap stemming from inaccurate and misreported statistics, and consistent underperformance on following through with reforms prompted major credit rating agencies in late 2009 to downgrade Greece's international debt rating, and has led the country into a financial crisis. Under intense pressure by the EU and international market participants, the government has adopted a medium-term austerity program that includes cutting government spending, reducing the size of the public sector, decreasing tax evasion, reforming the health care and pension systems, and improving competitiveness through structural reforms to the labor and product markets. Athens, however, faces long-term challenges to push through unpopular reforms in the face of often vocal opposition from the country's powerful labor unions and the general public. Greek labor unions are striking over new austerity measures, but the strikes so far have had a limited impact on the government's will to adopt reforms. An uptick in widespread unrest, however, could challenge the government's ability to implement reforms and meet budget targets, and could also lead to rioting or violence. In April 2010 a leading credit agency assigned Greek debt its lowest possible credit rating; in May, the International Monetary Fund and Eurozone governments provided Greece emergency short- and medium-term loans worth $147 billion so that the country could make debt repayments to creditors. In exchange for the largest bailout ever assembled, the government announced combined spending cuts and tax increases totaling $40 billion over three years, on top of the tough austerity measures already taken. Greece, however, struggled to boost revenues and cut spending to meet 2010 targets set by the EU and the IMF, especially after Eurostat - the EU's statistical office - revised upward Greece's deficit and debt numbers for 2009 and 2010. Greece's lenders are calling on Athens to step up efforts in 2011 to increase tax collection, shore up public enterprises, and rein in health spending, and are planning to give Greece more time to repay its EU-IMF loan. Greece responded by introducing major structural reforms, but investors still question whether Greece can sustain fiscal efforts in the face of a bleak economic outlook and public discontent. |
2010 January
Economy - overview | Greece has a capitalist economy with the public sector accounting for about 40% of GDP and with per capita GDP about two-thirds that of the leading euro-zone economies. Tourism provides 15% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek economy grew by nearly 4.0% per year between 2003 and 2007, due partly to infrastructural spending related to the 2004 Athens Olympic Games, and in part to an increased availability of credit, which has sustained record levels of consumer spending. But growth dropped to 2.9% in 2008, as a result of the world financial crisis and tightening credit conditions. Greece violated the EU's Growth and Stability Pact budget deficit criteria of no more than 3% of GDP from 2001 to 2006, but finally met that criteria in 2007-08. Public debt, inflation, and unemployment are above the euro-zone average, but are falling. The Greek Government continues to grapple with cutting government spending, reducing the size of the public sector, and reforming the labor and pension systems, in the face of often vocal opposition from the country's powerful labor unions and the general public. The economy remains an important domestic political issue in Greece and, while the ruling New Democracy government has had some success in improving economic growth and reducing the budget deficit, Athens faces long-term challenges in its effort to continue its economic reforms, especially social security reform and privatization. |
2009 January
Economy - overview | Greece has a capitalist economy with the public sector accounting for about 40% of GDP and with per capita GDP at least 75% of the leading euro-zone economies. Tourism provides 15% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek economy grew by nearly 4.0% per year between 2003 and 2007, due partly to infrastructural spending related to the 2004 Athens Olympic Games, and in part to an increased availability of credit, which has sustained record levels of consumer spending. But growth dropped to 2.8% in 2008, as a result of the world financial crisis and tightening credit conditions. Greece violated the EU's Growth and Stability Pact budget deficit criteria of no more than 3% of GDP from 2001 to 2006, but finally met that criteria in 2007-08. Public debt, inflation, and unemployment are above the euro-zone average, but are falling. The Greek Government continues to grapple with cutting government spending, reducing the size of the public sector, and reforming the labor and pension systems, in the face of often vocal opposition from the country's powerful labor unions and the general public. The economy remains an important domestic political issue in Greece and, while the ruling New Democracy government has had some success in improving economic growth and reducing the budget deficit, Athens faces long-term challenges in its effort to continue its economic reforms, especially social security reform and privatization. |
2008 January
Economy - overview | Greece has a capitalist economy with the public sector accounting for about 40% of GDP and with per capita GDP at least 75% of the leading euro-zone economies. Tourism provides 15% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek economy grew by nearly 4.0% per year between 2003 and 2007, due partly to infrastructural spending related to the 2004 Athens Olympic Games, and in part to an increased availability of credit, which has sustained record levels of consumer spending. Greece violated the EU's Growth and Stability Pact budget deficit criteria of no more than 3% of GDP from 2001 to 2006, but finally met that criteria in 2007. Public debt, inflation, and unemployment are above the euro-zone average, but are falling. The Greek Government continues to grapple with cutting government spending, reducing the size of the public sector, and reforming the labor and pension systems, in the face of often vocal opposition from the country's powerful labor unions and the general public. The economy remains an important domestic political issue in Greece and, while the ruling New Democracy government has had some success in improving economic growth and reducing the budget deficit, Athens faces long-term challenges in its effort to continue its economic reforms, especially social security reform and privatization. |
2007 January
Economy - overview | Greece has a capitalist economy with the public sector accounting for about 40% of GDP and with per capita GDP at least 75% of the leading euro-zone economies. Tourism provides 15% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in menial jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek economy grew by nearly 4.0% per year between 2003 and 2006, largely because of an investment boom and infrastructure upgrades for the 2004 Athens Olympic Games. Greece has not met the EU's Growth and Stability Pact budget deficit criteria of 3% of GDP since 2000. Public debt, inflation, and unemployment are above the euro-zone average. To overcome these challenges, the Greek Government is expected to continue cutting government spending, reducing the size of the public sector, and reforming the labor and pension systems, despite vocal opposition from the country's powerful labor unions and the general public. |
2006 January
Economy - overview | Greece has a capitalist economy with the public sector accounting for about 40% of GDP and with per capita GDP 70% of the leading euro-zone economies. Tourism provides 15% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in menial jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek economy grew by about 4.0% for the past two years, largely because of an investment boom and infrastructure upgrades for the 2004 Athens Olympic Games. Despite strong growth, Greece has failed to meet the EU's Growth and Stability Pact budget deficit criteria of 3% of GDP since 2000; public debt, inflation, and unemployment are also above the eurozone average. Further restructuring of the economy will need to include privatizing of several state enterprises, undertaking pension and other reforms, and minimizing bureaucratic inefficiencies. |
2005 January
Economy - overview | Greece has a capitalist economy with the public sector accounting for about 40% of GDP and with per capita GDP 70% of the leading euro-zone economies. Tourism provides 15% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in menial jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek economy grew by about 4.0% for the past two years, largely because of an investment boom and infrastructure upgrades for the 2004 Athens Olympic Games. Despite strong growth, Greece has failed to meet the EU's Growth and Stability Pact budget deficit criteria of 3% of GDP since 2000; public debt, inflation, and unemployment are also above the eurozone average. Further restructuring of the economy will need to include privatizing of several state enterprises, undertaking pension and other reforms, and minimizing bureaucratic inefficiencies. |
2004 January
Economy - overview | Greece has a mixed capitalist economy with the public sector accounting for half of GDP and with per capita GDP 70% of the leading euro-zone economies. Tourism provides 15% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in menial jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of GDP. The Greek economy grew by 4.0% in 2003 and is expected to grow by 4.2% in 2004, the year that Athens will host the 2004 Olympic Games. Remaining challenges include the reduction of the public debt, inflation, and unemployment; and further restructuring of the economy, including privatizing several state enterprises, undertaking pension and other reforms, and minimizing bureaucratic inefficiencies. |
2003 January
Economy - overview | Greece has a mixed capitalist economy with the public sector accounting for half of GDP and with per capita GDP 70% of the leading euro-zone economies. Tourism provides 15% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in menial jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of GDP. The economy has improved steadily with economic growth averaging 4% since 1997, exceeding EU growth by more than 1 percentage point. Major challenges remaining include the reduction of the public debt, inflation, and unemployment, and further restructuring of the economy, including privatizing several state enterprises, undertaking serious reforms, and minimizing bureaucratic inefficiencies. |
2002 January
Economy - overview | Greece has a mixed capitalist economy with the public sector accounting for about half of GDP. Tourism is a key industry, providing a large portion of GDP and foreign exchange earnings. Greece is a major beneficiary of EU aid, equal to about 3.3% of GDP. The economy has improved steadily over the last few years, as the government tightened policy in the run-up to Greece's entry into the EU's Economic and Monetary Union (EMU) on 1 January 2001. Major challenges remaining include the reduction of unemployment and further restructuring of the economy, including privatizing several state enterprises, undertaking social security reforms, overhauling the tax system, and minimizing bureaucratic inefficiencies. Economic growth is forecast at 3%-3.5% in 2002. |
2001 January
Economy - overview | Greece has a mixed capitalist economy with the public sector accounting for about half of GDP. Tourism is a key industry, providing a large portion of GDP and foreign exchange earnings. Greece is a major beneficiary of EU aid, equal to about 4% of GDP. The economy has improved steadily over the last few years, as the government has tightened policy in the run-up to Greece's entry into the EU's Economic and Monetary Union (EMU) on 1 January 2001. In particular, Greece has cut its budget deficit to below 1% of GDP and tightened monetary policy, with the result that inflation fell from 20% in 1990 to 3.1% in 2000. Major challenges remaining include the reduction of unemployment and further restructuring of the economy, including the privatization of some leading state enterprises. Growth, 3.8% in 2000, may fall off to 3%-3.5% in 2001. |
2000 January
Economy - overview | Greece has a mixed capitalist economy with the public sector accounting for about half of GDP. The government plans to privatize some leading state enterprises. Tourism is a key industry, providing a large portion of GDP and foreign exchange earnings. Greece is a major beneficiary of EU aid, equal to about 4% of GDP. The economy has improved steadily over the last few years, as the government has tightened policy with the goal of qualifying Greece to join the EU's single currency (the euro) in 2001. In particular, Greece has cut its budget deficit below 2% of GDP and tightened monetary policy, with the result that inflation fell below 4% by the end of 1998 - the lowest rate in 26 years - and averaged only 2.6% in 1999. Further restructuring of the economy and the reduction of unemployment remain major challenges. |
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This page was last updated on 5 February, 2012 |
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