Greece

Capital: Athens

Local time:
It is %T:%M %A in Athenes

Exchange rate on :

GDP growth rate: 1.5% in 2013

FDI stock: 33 559 million USD in 2010

Country risk: See the country risk analysis from Greece provided by Ducroire.

Economic trends

Although the crisis hit Greece later than its European neighbors, it nevertheless plunged the country into a deep recession. Greece had to be saved from bankrupcy by the International Monetary Fund (IMF) and the European Commission (EC), however the budgetary restriction measures adopted to restore public finances have taken their toll on growth. In 2011, the fourth consecutive year of economic decline, GDP growth contracted by -6.8%. Forecasts for 2012 are similar (-7%).

Despite a series of austerity plans and structural reforms intended to heal and restore the economy, in 2011 Greece only sunk further into recession. The rating agency Standard & Poor's downgraded the country's note, putting it into the category of "selective default". In October, Greece and its European partners have agreed to ask private creditors to cut the value of state obligations by 50%. In February 2012, a new austerity plan was adopted by the Greek Parliament and the minimum wage was reduced by 22%. The priority remains reducing the budget deficit and public debt and improving the business climate in order to make economic recovery possible. The poor state of public finances and the weak banking sector jeopardize the membership of Greece in the eurozone.

The country is facing growing unemployment (16.5%) and a proliferation of social protest movements against the austerity measures.

Main branches of industry

Traditionally, the Greek economy is based on agriculture. The sector represents 3% of the GDP and employs around 12% of the active population. The main crops are tobacco (largest European producer) and cotton (fifth largest exporter in the world). Greece also has a significant ovine livestock and a large fishing industry is found in coastal regions.

Thanks to the economic diversification led by the country, industry has replaced agriculture as a second source of income, behind services, and accounts for around 20% of the GDP. The main sectors are: electronic goos, transport materials, clothing and construction. More specifically, Greece is the largest European shipowner.

The tertiary sector accounts for nearly three-fourths of the GDP and employes two thirds of the workforce. Tourism provides a vital source of income and alone contributes 11% of the GDP. Marine fishing represents 10% of the GDP.

International trade

Greece has an export-oriented economy, trade representing more than 50% of the GDP (2008-2010). Its main trading partners are the European Union (especially Italy and Germany) and the United States. Structurally in deficit, the trade balance improved in 2011 due to the resumption of exports.