Greece flag Greece: Economic and Political Overview

The economic context of Greece

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

The Greek economy was estimated to be among the most severely hit by Covid-19 despite the relatively limited number of cases and death rates in the country compared with most of Europe. This was mostly due to Greece's heavy reliance on tourism and the hospitality industry, which not only weighed on the trade and current account balance but also employment and domestic consumption. However, the country’s economy rebounded strongly in the second half of 2021, when real GDP reached its pre-pandemic level. Overall, Greek GDP is estimated to have grown 6.5% in 2021 (IMF), driven by a buoyant domestic demand and a better-than-expected tourist season. The launch of the European Recovery and Resilience Plan and a positive contribution of the external sector should drive a growth of 4.6% this year, followed by 2.6% in 2023 (IMF forecasts).

Government expenses increased drastically in an attempt to fight the COVID-19 pandemic (estimated at 6.5% of GDP). Coupled with a contraction in revenues and the cost of the relief measures taken in response to the extensive forest fires in August, it resulted in a budget deficit of 7.1% in 2021. The general government deficit is expected to decrease to 1.9% of GDP in 2022 thanks to the economic rebound and to the phasing out of the majority of the emergency measures. Public debt – which had been on a downward trend in recent years – skyrocketed by more than 25% of GDP in the aftermath of the pandemic. Despite being among the highest ratios in the world, in 2021 it started decreasing (206.7% of GDP) and is expected to further contract this year and the next (199.4% and 192.4%, respectively - IMF). Despite rising global energy prices, headline inflation remained almost null in 2021 (-0.1%) on account of the weak demand during the first semester of the year. The IMF forecasts a gradual increase over the forecast horizon, at 0.4% this year and 1.1% in 2023.

In 2021, the government's furlough support schemes prevented further job losses; nevertheless, the unemployment rate increased 15.8%, one of the highest levels in Europe. The recovery of the economy is set to accelerate job creation, thus a decrease in unemployment, projected at 14.6% in 2022 and 13.1% the following year (IMF forecast).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 205.35189.26e211.65224.89236.24
GDP (Constant Prices, Annual % Change) 1.9-8.26.54.62.6
GDP per Capita (USD) 19,147e17,657e19,82721,15522,314
General Government Balance (in % of GDP) 2.9-3.6e-7.1-1.9-2.6
General Government Gross Debt (in % of GDP) 184.9211.2e206.7199.4192.4
Inflation Rate (%) 0.5-1.3e0.64.51.3
Unemployment Rate (% of the Labour Force) 17.316.415.814.613.1
Current Account (billions USD) -4.58-14.05-15.68-11.55-11.54
Current Account (in % of GDP) -2.2-7.4e-7.4-5.1-4.9

Source: IMF – World Economic Outlook Database, October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Traditionally, Greece's economy has been based on agriculture, but nowadays the sector represents only 4.2% of GDP and employs 12% of the labour force (World Bank, latest data available). The country has an agricultural area of around 6,136k hectares and a forest area of 3,901k hectares (FAO). The main crops are tobacco (third largest European producer) and cotton. Olives - many of which are used to produce olive oil - are the country's most renowned export crop. Greece also has an important sheepherding industry and the fishing sector is well developed in the coastal regions.


As a result of the country's diversification of the economy, industry has replaced agriculture as the second source of income after services, accounting for 15% of GDP and employing the same percentage of the labour force. However, its share was higher before the economic crisis of 2007 (above 20%). The main sectors are electronics, transport equipment, clothing manufacturing and construction. Moreover, Greece has the largest maritime fleet in the world.

The service sector accounts for 68.6% of GDP and employs 73% of the labour force. Tourism provides an essential source of income and on its own contributes to almost one-fifth of GDP (the primary sector of contribution to national GDP). The sector directly employs just below 400,000 people, accounting for 10% of total employment in the country (OECD). However, the tourism industry was severely affected by the COVID-19 pandemic, and in 2021 it generated only half of the revenues reached in 2019.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 11.6 15.3 73.1
Value Added (in % of GDP) 4.1 13.9 69.8
Value Added (Annual % Change) -0.3 -2.4 -9.7

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

Find more information about your business sector on our service Market reports.

 
 

Find out all the exchange rates daily on our service International currency converter.

 

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:
60,9/100
World Rank:
96
Regional Rank:
44

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.70/10
World Rank:
42/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025

 

Country Risk

See the country risk analysis provided by Coface.
 

Return to top

Sources of General Economic Information

Ministries
Ministry of Economy, Development and Tourism
Ministry of Rural Development and Food
Ministry of Finance
Ministry of Shipping and Insular Policy
Ministry of Infrastructures, Transport and Networks (in Greek)
Statistical Office
Hellenic Statistical Authority (ELSTAT)
Central Bank
European Central Bank
Bank of Greece
Stock Exchange
Athens Exchange
Economic Portals
Capital
Imerisia
 

Return to top

Any Comment About This Content? Report It to Us.

 

© Export Entreprises SA, All Rights Reserved.
Latest Update: September 2022