In the past ten years, Greece experienced high growth rates which averaged 3.7%, compared with 2% in the euro area. The Greek economy weathered the initial impact of the crisis fairly well and will experience a relatively mild recession, compared to its eurozone peers. The medium-term recovery will very much depend on the government’s efforts to correct fiscal and external imbalances and boost eroding competitiveness.
According to 2008 data, household consumption constitutes 71% of the country's GDP, significantly higher than the EU average (57%). Germany and Italy are the biggest trading partners. Tourism and shipping revenues account for over a quarter of the country's GDP. According to the World Bank, Greece was the 27th largest economy in 2008, as measured by GDP. The population amounted to 11.2 million in 2008.
The country has been running persistent budget deficits above the EU's 3% limit since 2000. Seen by many as the eurozone's weakest link, Greece risks sanctions by the European Commission if it fails to meet a 2010 deadline to bring the deficit below 3% of GDP. As of 2008, the country's external debt is around 150% of GDP, of which two-thirds is public sector debt. Due to the combination of ballooning public debt, eroding competitiveness, and a widening budget deficit, Greece is the lowest-rated country among the sixteen using the euro.
The new Socialist government, which came to power in October 2009, is expected to improve relations with Turkey, push for a breakthrough in Cyprus-reunification talks and support the EU accession process for Western Balkans countries.
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Jul 31, 2009
Economic Survey of Greece 2009
Aug 06, 2009
Greece: 2009 Article IV Consultation—Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Greece
Greece: Persistent and large structural imbalances take their toll