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Economic Overview

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 (%) 0.5-1.3e-0.10.41.1
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

Country Risk

See the country risk analysis provided by La Coface.

 

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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.

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.

 

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Foreign Trade

Greece has an export-oriented economy, with trade representing 72% of GDP (World Bank, latest data available). Petroleum products account for both imported and exported items as the country imports crude oil and exports refined products. Medicine, fish and olive oil are among the most exported items. Medicines account for a significant share of imports (4.4%), followed by motor cars.

Trade with EU countries accounts for half of imports and exports. Italy and Germany are Greece's main trading partners with Italy being the top destination for Greek exports (10.5%) and Germany being the main supplier of goods and services (11.9%). Italy (8.3%), China (7.7%) and the Netherlands (6.1%) are the other major suppliers.

Structurally in deficit, the trade balance improved between 2009 and 2016 as imports declined faster than exports. In 2020, exports of goods totalled USD 35.1 billion (-7.4% y-o-y) as imports declined at a faster pace (-10.8% - at USD 55.7 billion). In the same year, exports of services stood at USD 25.8 billion, marking a 42.8% drop, with imports decreasing marginally (-17.5% - at USD 17.4 billion). The World Bank estimates the country’s trade deficit at 7.6% of GDP in 2020, up from a level of 1.7% one year earlier. The latest figures from the Hellenic Statistical Authority show that the total value of imports for the 10-month period from January to October 2021 amounted to USD 60.8 billion (+27% y-o-y), while exports stood at USD 38.7 billion (+29% y-o-y).

 
Foreign Trade Values 20162017201820192020
Imports of Goods (million USD) 48,59254,29163,87762,51055,691
Exports of Goods (million USD) 28,13732,64539,50237,90735,169
Imports of Services (million USD) 10,71517,44220,89621,11317,401
Exports of Services (million USD) 27,77737,76843,72944,80725,809

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20162017201820192020
Foreign Trade (in % of GDP) 64.171.580.081.871.3
Trade Balance (million USD) -19,858-22,389-26,532-25,572-21,135
Trade Balance (Including Service) (million USD) -1,713-1,656-3,935-2,008-12,737
Imports of Goods and Services (Annual % Change) 2.27.48.03.0-6.8
Exports of Goods and Services (Annual % Change) -0.48.59.14.8-21.7
Imports of Goods and Services (in % of GDP) 32.836.541.141.739.4
Exports of Goods and Services (in % of GDP) 31.335.039.040.131.9

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20212022 (e)2023 (e)2024 (e)2025 (e)
Volume of exports of goods and services (Annual % change) 10.215.25.93.12.9
Volume of imports of goods and services (Annual % change) 4.68.84.73.43.1

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Greece is a member of the following international economic organisations: IMF, European Union, WTO, European Economic Area, ICC, Black Sea Economic Cooperation Zone (BSEC), OECD, among others. For the full list of economic and other international organisations in which participates Greece click here. International organisation membership of Greece is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Greece can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2020
Italy 10.5%
Germany 7.7%
Cyprus 6.0%
France 5.8%
Bulgaria 4.8%
See More Countries 65.3%
Main Suppliers
(% of Imports)
2020
Germany 11.9%
Italy 8.3%
China 7.7%
Netherlands 6.1%
Russia 6.0%
See More Countries 60.0%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Katerina Sakellaropoulou (since 13 March 2020)
Prime Minister: Kyriakos Mitsotakis (since 8 July 2019)
Next Election Dates
Presidential: February 2025
Parliamentary: July 2023
Current Political Context
The pro-business government of Kyriakos Mitsotakis continued to make efforts to improve bureaucracy, while also proceeding to liberalise some of the state-owned institutions in 2021. His centre-right New Democracy Party’s absolute majority in the parliament allows for the swift adoption of policies. The government aims at improving tax collection and expanding the tax base to allow for tax cuts such as a corporate tax rate reduction in 2022.

Diplomatic relations with Turkey have been tense, especially after the discovery of hydrocarbon reserves in the Greek archipelago. Nevertheless, during 2021 the two countries resumed talks on maritime disputes, ending a five-year hiatus.
Main Political Parties
- Coalition of the Radical Left (SYRIZA): left-wing anti-establishment, populist, anti-austerity
- New Democracy (ND): centre-right
- Movement For Change (KINAL): centre-left
- Greek Solution: right-wing, ultranationalist
- European Realistic Disobedience Front (MeRA25): left-wing
- Communist Party of Greece (KKE): Marxist-Leninist
- Panhellenic Socialist Movement (PASOK): centre-left, supports social liberalism
- Independent Greeks (AE): right-wing, anti-immigration, but economically more left and anti-austerity
- Democratic Left (DIMAR): centre-left to left-wing
- Ecologist Greens (OP): green
- Popular Orthodox Rally (LAOS): far-right
- Union Of Centrists (EK): Centrist Opposition
Executive Power
According to the Constitution, executive power is exercised by the President of the Republic and the Government. The role of the President in the executive branch has been reduced to ceremonial since 1986. The post of Prime Minister, Greece's head of government, belongs to the current leader of the political party that can obtain the confidence of a parliamentary majority. The President of the Republic formally appoints the Prime Minister and, on his or her recommendation, appoints and dismisses the other members of the Cabinet. The Prime Minister exercises vast political power and the amendment of 1986 further strengthened their position to the detriment of the President of the Republic.
Legislative Power
Legislative power is exercised by a 300-member unicameral Parliament. Statutes passed by the Parliament are promulgated by the President of the Republic. Parliamentary elections are held every four years, but the President of the Republic is required to dissolve the Parliament earlier on the proposal of the Cabinet, when faced with a national issue of exceptional importance. The President is also required to dissolve the Parliament earlier than scheduled if the opposition succeeds to pass a motion of no confidence.
 

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COVID-19 Country Response

COVID-19 epidemic evolution
The Greek government provides statistics about the COVID-19 epidemic in the country through the official website Covid19.gov.gr.
For the international outlook you can consult the latest
situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures

To find out about the latest public health situation in Greece and the current sanitary measures in vigour, please consult the dedicated pages on the government’s official website Covid19.gov.gr (in Greek). For further information visit the website of the National Public Health Organization.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the dedicated pages on the portal of the Greek trade and investment agency Enterprise Greece. The “Guidelines for border management measures to protect health and ensure the availability of goods and essential services” issued by the European Commission can be consulted here. For the updated overview of the introduced trade import and export restrictions and other trade measures (ex. tariffs reductions) due to COVID-19 pandemic, please consult the section dedicated to Greece on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan
For information on the economic recovery scheme put in place by the Greek government to address the impact of the COVID-19 pandemic, refer to the specific pages provided by the official website Covid19.gov.gr (in Greek). Further details can be accessed on the website of the Greek trade and investment agency Enterprise Greece.
The information on the EU’s economic response to COVID-19 and the actions to minimise the fallout on the EU member states’ economies of the COVID-19 outbreak is available on the website of the
European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Greek government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Greece in the
IMF’s Policy Tracker platform.
Support plan for businesses

For information on all business and employee support measures put in place by the Greek government to address the impact of the COVID-19 pandemic, refer to the specific pages provided by the official website Covid19.gov.gr (in Greek).
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document.

You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

For the updated information on specific programs in support of Greek exporting companies put in place by the national government following the COVID-19 epidemic, if applicable, please consult the website of the Ministry of Finance. The European Commission adopted a Temporary Framework for State aid measures to support the economy in the COVID-19 outbreak, which enables short-term export credit insurance to be provided by the State where needed.

 

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