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Economic and political overview

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.

Due to Greece's heavy reliance on tourism and the hospitality industry, the country was among the most severely hit by the Covid-19-induced crisis. However, the Greek economy rebounded strongly and GDP reached its pre-pandemic level already in the second half of 2021. In 2022, the overall growth was estimated at 5.2% (IMF): after a better-than-expected performance in the first half of the year owing to rebounding exports and a historical peak of the tourism sector, the rise in energy costs and a worsening external environment hampered growth in the second part of the year. Rising input costs and slowing demand are expected to hinder growth in 2023, with the IMF forecasting a sluggish GDP increase of 1.8%. For 2024, growth is set to pick up moderately to 2.2%, driven by the gradual recovery of private consumption and improving external demand.

The general government deficit decreased from to 2.3% of GDP in 2022 (from 4.6% one year earlier) thanks to the phasing out of pandemic-related measures and the economic recovery, although the measures taken to mitigate the impact of high energy prices (e.g. subsidies to energy users and cuts to indirect taxes on transport services) weighted for around 1.1% of GDP. The general government deficit is expected to narrow further to 1.9% of GDP this year and 1.6% in 2024 (IMF). The public debt-to-GDP ratio stood at 177.6% of GDP in 2022 and is forecast to further decrease to 169.8% in 2023 and 163.8% in 2024 supported by the increase in nominal GDP and lower deficits. Despite the primary surpluses recorded in recent years, the ratio is still among the highest in the world. After being in the target area in 2021 (0.6%), inflation reached a record-high level of 9.2% in 2022 due to rising energy prices and the pass-through to other components. As energy prices stabilise over the forecast horizon and euro area monetary tightening takes effect, inflation is projected to moderate to 3.2% this year and 1.6% in 2024 (IMF).

Weakening job creation and the absence of the indexation of public wages and social benefits are expected to keep nominal wage growth below inflation. Overall, the unemployment rate was estimated at 12.6% in 2022, with employment reaching its highest level since 2010. Nevertheless, Greece is experiencing one of the largest increases in labour shortages among EU countries, especially in the construction sector. The IMF expects the unemployment rate to decrease to 12.2% in 2023 and 11.4% in 2024. According to the latest data by Eurostat, Greece has a real GDP per capita of EUR 17,610, well below the EU average (EUR 27,880).

 
Main Indicators 202020212022 (E)2023 (E)2024 (E)
GDP (billions USD) 188.77215.02219.24239.30248.27
GDP (Constant Prices, Annual % Change) -9.08.45.92.61.5
GDP per Capita (USD) 17,61220,13520,61522,59523,539
General Government Balance (in % of GDP) -2.4-4.2-3.3-2.8-1.6
General Government Gross Debt (in % of GDP) 212.4200.7177.4166.0160.5
Inflation Rate (%) -1.30.69.34.02.9
Unemployment Rate (% of the Labour Force) 16.314.812.211.210.4
Current Account (billions USD) -13.84-15.26-21.23-19.20-14.98
Current Account (in % of GDP) -7.3-7.1-9.7-8.0-6.0

Source: IMF – World Economic Outlook Database , October 2021

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 3.9% of GDP and employs 12% of the labour force (World Bank, latest data available). The country has an agricultural area of around 5,867k hectares and a forest area of 3,901k hectares (FAO). The main crops are tobacco (the 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 has an important sheepherding industry and the fishing sector is well developed in the coastal regions: aquaculture sales climbed to a 10-year high in 2021 (EUR 636 million, up 7% in volume and 10% in value year-on-year – national institute of statistics).

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 15.3% of GDP and employing roughly the same percentage of the labour force. However, its share was higher before the economic crisis of 2007 (above 20%). Manufacturing is estimated to account for 9% of GDP (World Bank). 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 68.2% 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 the national economy). The sector directly employs just below 400,000 people, accounting for 10% of total employment in the country. Despite being affected by the COVID-19 pandemic, in 2022 the tourism industry generated a turnover of around EUR 18 billion (in the third quarter of the year, accommodation and restaurant services turnover exceeded 2019 levels). Regarding the Greek banking system, the number of domestic credit institutions was drastically reduced from 35 in 2009 to fifteen 15 in 2021, of which nine are commercial and six cooperative banks (European Banking Federation).

 
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) 3.9 15.3 68.2
Value Added (Annual % Change) -2.5 10.7 7.9

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 89% of GDP (World Bank, latest data available). According to data by the Hellenic Statistical Authority, fuel had the largest share of exports for 2021 (28.2%) followed by raw material (15.6%), food products (14.8%) and chemicals (14.2%). As per imports, fuel had the lion’s share of imports (26.4%) followed by transport material and machinery (19.2%) and chemicals (17.0%).

Over the course of 2021, exports to the European Union accounted for 53.7% of the total. The main trading partners were Italy (10.6%), Germany (7.8%), Cyprus (6.4%), Turkey (5.8%) and Bulgaria (5%). Concerning imports, Germany was the main trading partner (12.4%), followed by Italy (9%), China (7.7%), Russia (6.3%) and Iraq (6%). Overall, the EU accounted for 51.2% of total imports (Hellenic Statistical Authority).

Data by WTO shows that in 2021 exports of goods reached USD 47.1 billion, marking a 34.1% increase year-on-year; whereas imports stood at EUR 75.8 billion (+36.2% y-o-y). As per services, exports totalled USD 41.4 billion against USD 26 billion of imports (+60.4% and +49.6% year-on-year, respectively). The World Bank estimated the country’s trade deficit at 7.7% of GDP in 2021, the same level as the previous year. The latest figures from the Hellenic Statistical Authority show that the total value of imports for the 10-month period from January to October 2022 amounted to EUR 45.3 billion (+39.7% y-o-y), while exports stood at EUR 76.7 billion (+48.4% y-o-y). In the same period, the deficit of the trade balance reached EUR 31.3 billion, up by 63.2% over the year.

 
Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 54,29163,87762,51055,69175,855
Exports of Goods (million USD) 32,64539,50237,90735,16947,170
Imports of Services (million USD) 17,44220,89621,11317,40126,033
Exports of Services (million USD) 37,76843,72944,80725,80941,397

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

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 71.680.281.971.789.5
Trade Balance (million USD) -22,389-26,532-25,572-21,135-31,224
Trade Balance (Including Service) (million USD) -1,656-3,935-2,008-12,737-16,011
Imports of Goods and Services (Annual % Change) 7.48.12.9-7.317.7
Exports of Goods and Services (Annual % Change) 8.59.14.9-21.524.1
Imports of Goods and Services (in % of GDP) 36.541.241.839.748.6
Exports of Goods and Services (in % of GDP) 35.039.040.132.040.9

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change) 14.93.04.03.83.3
Volume of imports of goods and services (Annual % change) 8.61.82.12.22.1

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)		 2021
Italy 9.8%
Germany 7.2%
Cyprus 5.9%
Türkiye 5.2%
Bulgaria 4.7%
See More Countries 67.3%
Main Suppliers
(% of Imports)		 2021
Germany 10.5%
Italy 7.9%
China 7.7%
Netherlands 5.4%
France 4.0%
See More Countries 64.6%

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 from the centre-right New Democracy Party can count on an absolute majority in the parliament (158 out of 300 seats) which allowed for the swift adoption of policies during the legislature. These included efforts to liberalise some of the state-owned institutions, strengthen independence and transparency in the public sector and support the economy through the pandemic crisis and the energy crisis prompted by the invasion of Ukraine by Russia.

Legislative elections are scheduled for July 2023. For the first time since 1990, the electoral system will not use a bonus seats system, after the repeal of semi-proportional representation. Therefore, coalition-building will be likely. As of the beginning of 2023, polls tend to see the New Democracy Party still holding the lead (>35%), followed by the centre-left Syriza (around 30%) and Pasok-Kinal (12%).
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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