Greece: Economy#

Greece has a capitalist economy with a 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 18% 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 averaged growth of about 4% per year between 2003 and 2007, 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. By 2013 the economy had contracted 26%, compared with the pre-crisis level of 2007. Greece met the EU's Growth and Stability Pact budget deficit criterion of no more than 3% of GDP in 2007-08, but violated it in 2009, with the deficit reaching 15% of GDP. Deteriorating public finances, inaccurate and misreported statistics, and consistent underperformance on reforms prompted major credit rating agencies to downgrade Greece's international debt rating in late 2009 and led the country into a financial crisis. Under intense pressure from the EU and international market participants, the government accepted a bailout program that called on Athens to cut government spending, decrease tax evasion, overhaul the civil-service, health-care, and pension systems, and reform the labor and product markets. Austerity measures reduced the deficit to 3% in 2015. Successive Greek governments, however, failed to push through many of the most unpopular reforms in the face of widespread political opposition, including from the country's powerful labor unions and the general public.

In April 2010, a leading credit agency assigned Greek debt its lowest possible credit rating, and in May 2010, the International Monetary Fund and euro-zone 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 meet the 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. European leaders and the IMF agreed in October 2011 to provide Athens a second bailout package of $169 billion. The second deal called for holders of Greek government bonds to write down a significant portion of their holdings to try to alleviate Greece’s government debt burden. However, Greek banks, saddled with a significant portion of sovereign debt, were adversely affected by the write down and $60 billion of the second bailout package was set aside to ensure the banking system was adequately capitalized. In exchange for the second bailout, Greece promised to step up efforts to increase tax collection, to reduce the size of government, and to rein in health spending. These austerity measures were designed to generate $7.8 billion in savings during 2013-15, but in fact prolonged Greece's economic recession and depressed tax revenues.

In 2014, the Greek economy began to turn the corner on the recession. Greece achieved three significant milestones: balancing the budget - not including debt repayments; issuing government debt in financial markets for the first time since 2010; and generating 0.7% GDP growth — the first economic expansion since 2007.

Despite the nascent recovery, widespread discontent with austerity measures helped propel the far-left Coalition of the Radical Left (SYRIZA) party into government in national legislative elections in January 2015. Between January and July 2015, frustrations between the SYRIZA-led government and Greece’s EU and IMF creditors over the implementation of bailout measures and disbursement of funds led the Greek government to run up significant arrears to suppliers and Greek banks to rely on emergency lending, and also called into question Greece’s future in the euro zone. To stave off a collapse of the banking system, Greece imposed capital controls in June 2015 shortly before rattling international financial markets by becoming the first developed nation to miss a loan payment to the IMF. Unable to reach an agreement with creditors, Prime Minister Alexios TSIPRAS held a nationwide referendum on 5 July on whether to accept the terms of Greece’s bailout, campaigning for the ultimately successful "no" vote. The TSIPRAS government subsequently agreed, however, to a new $96 billion bailout in order to avert Greece’s exit from the monetary bloc. On 20 August, Greece signed its third bailout which allowed it to cover significant debt payments to its EU and IMF creditors and ensure the banking sector retained access to emergency liquidity. The TSIPRAS government — which retook office on 20 September after calling new elections in late August — successfully secured disbursal of two delayed tranches of bailout funds. Despite the economic turmoil, Greek GDP did not contract as sharply as feared, with official source estimates of a -0.2% contraction in 2015, boosted in part by a strong tourist season.

Economic Facts#

GDP (purchasing power parity)$290.5 billion (2016 est.)
$290.3 billion (2015 est.)
$291 billion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$195.9 billion (2015 est.)
GDP - real growth rate0.1% (2016 est.)
-0.2% (2015 est.)
0.7% (2014 est.)
GDP - per capita (PPP)$26,800 (2016 est.)
$26,700 (2015 est.)
$26,600 (2014 est.)
note: data are in 2016 dollars
Gross national saving10.3% of GDP (2016 est.)
9.8% of GDP (2015 est.)
10.1% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 71.1%
government consumption: 19.8%
investment in fixed capital: 10.7%
investment in inventories: -2.3%
exports of goods and services: 29.1%
imports of goods and services: -28.4% (2016 est.)
GDP - composition, by sector of originagriculture: 4.1%
industry: 15%
services: 80.9% (2016 est.)
Agriculture - productswheat, corn, barley, sugar beets, olives, tomatoes, wine, tobacco, potatoes; beef, dairy products
Industriestourism, food and tobacco processing, textiles, chemicals, metal products; mining, petroleum
Industrial production growth rate-1% (2016 est.)
Labor force4.761 million (2016 est.)
Labor force - by occupationagriculture: 12.6%
industry: 15%
services: 72.4% (30 October 2015 e)
Unemployment rate24.6% (2016 est.)
25% (2015 est.)
Population below poverty line36% (2014 est.)
Household income or consumption by percentage sharelowest 10%: 1.7%
highest 10%: 26.7% (2015 est.)
Distribution of family income - Gini index36.7 (2012 est.)
35.7 (2011)
Budgetrevenues: $93.34 billion
expenditures: $102.1 billion (2016 est.)
Taxes and other revenues47.7% of GDP (2016 est.)
Budget surplus (+) or deficit (-)-4.5% of GDP (2016 est.)
Public debt181.6% of GDP (2016 est.)
177.4% of GDP (2015 est.)
Fiscal yearcalendar year
Inflation rate (consumer prices)-0.2% (2016 est.)
-1.7% (2015 est.)
Central bank discount rate0.05% (31 March 2016)
0.15% (11 June 2014)
note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the euro area
Commercial bank prime lending rate5.7% (31 December 2016 est.)
5.89% (31 December 2015 est.)
Stock of narrow money$85.68 billion (31 December 2016 est.)
$86.69 billion (31 December 2015 est.)
note: see entry for the European Union for money supply for the entire euro area; the European Central Bank (ECB) controls monetary policy for the 18 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of
Stock of broad money$260.9 billion (31 December 2014 est.)
$264.6 billion (31 December 2013 est.)
Stock of domestic credit$250 billion (31 December 2016 est.)
$259.6 billion (31 December 2015 est.)
Market value of publicly traded shares$42.08 billion (31 December 2015 est.)
$55.15 billion (31 December 2014 est.)
$82.59 billion (31 December 2013 est.)
Current account balance-$70 million (2016 est.)
-$90 million (2015 est.)
Exports$21.93 billion (2016 est.)
$27.5 billion (2015 est.)
Exports - commoditiesfood and beverages, manufactured goods, petroleum products, chemicals, textiles
Exports - partnersItaly 11.2%, Germany 7.3%, Turkey 6.6%, Cyprus 5.9%, Bulgaria 5.2%, US 4.8%, UK 4.2%, Egypt 4% (2015)
Imports$42.73 billion (2016 est.)
$46.62 billion (2015 est.)
Imports - commoditiesmachinery, transport equipment, fuels, chemicals
Imports - partnersGermany 10.7%, Italy 8.4%, Russia 7.9%, Iraq 7%, China 5.9%, Netherlands 5.5%, France 4.5% (2015)
Reserves of foreign exchange and gold$6.026 billion (31 December 2015 est.)
$6.212 billion (31 December 2014 est.)
Debt - external$506.6 billion (31 March 2016 est.)
$468.2 billion (31 March 2015 est.)
Stock of direct foreign investment - at home$22.15 billion (31 December 2016 est.)
$21.28 billion (31 December 2015 est.)
Stock of direct foreign investment - abroad$29.67 billion (31 December 2016 est.)
$30.07 billion (31 December 2015 est.)
Exchange rateseuros (EUR) per US dollar -
0.9214 (2016 est.)
0.885 (2015 est.)
0.885 (2014 est.)
0.7634 (2013 est.)
0.78 (2012 est.)