According to World Bank statistics for the year 2013, the economy of Greece is the 43rd largest by nominal gross domestic product at $242 billion and 52nd largest by purchasing power parity (PPP) at $284 billion. Additionally, Greece is the 15th largest economy in the 27-member European Union. In terms of per capita income, Greece is ranked 38th or 40th in the world at $21,910 and $25,705 for nominal GDP and PPP respectively. The Greek economy is classified as advanced and high-income.
Greece is a developed country with a high standard of living and a high ranking in the Human Development Index. Its economy mainly comprises the service sector (85.0%) and industry (12.0%), while agriculture makes up 3.0% of the national economic output. Important Greek industries include tourism (with 14.9 million international tourists in 2009, it is ranked as the 7th most visited country in the European Union and 16th in the world by the United Nations World Tourism Organization) and merchant shipping (at 16.2% of the world’s total capacity, the Greek merchant marine is the largest in the world), while the country is also a considerable agricultural producer (including fisheries) within the union.
Greek unemployment stood at 21.7% in April 2017. The youth unemployment rate (42.3% in March 2018) is extremely high compared to EU standards.
With an economy larger than all the other Balkan economies combined, Greece is the largest economy inGreek unemployment stood at 21.7% in April 2017. The youth unemployment rate (42.3% in March 2018) is extremely high compared to EU standards.
With an economy larger than all the other Balkan economies combined, Greece is the largest economy in the Balkans, and an important regional investor. Greece is the number-two foreign investor of capital in Albania, the number-three foreign investor in Bulgaria, at the top-three of foreign investors in Romania and Serbia and the most important trading partner and largest foreign investor of North Macedonia. Greek banks open a new branch somewhere in the Balkans on an almost weekly basis. The Greek telecommunications company OTE has become a strong investor in Yugoslavia and other Balkan countries.
Greece was a founding member of the Organisation for Economic Co-operation and Development (OECD) and the Organization of the Black Sea Economic Cooperation (BSEC). In 1979 the accession of the country in the European Communities and the single market was signed, and the process was completed in 1982. Greece was accepted into the Economic and Monetary Union of the European Union on 19 June 2000, and in January 2001 adopted the Euro as its currency, replacing the Greek drachma at an exchange rate of 340.75 drachma to the Euro. Greece is also a member of the International Monetary Fund and the World Trade Organization, and is ranked 24th on the KOF Globalization Index for 2013.
Debt crisis (2010–2018)
Main article: Greek government-debt crisis
Greece’s debt percentage since 1977, compared to the average of the Eurozone
The Greek economy had fared well for much of the 20th century, with high growth rates and low public debt). For over 20 years, until 2007, it featured high rates of growth, which, however, were coupled with high structural deficits, thus maintaining a (roughly unchanged throughout this period) public debt to GDP ratio of just over 100% . The Greek crisis was triggered by the turmoil of the 2007-2009 Great Recession, which lead the budget deficits of several Western nations to reach or exceed 10% of GDP . What was exceptional for Greece, was that the high budget deficit (which, after several corrections and revisions, was revealed that it had been allowed to reach 10.2% and 15.1% of GDP in 2008 and 2009, respectively) was simultaneously coupled with a high public debt to GDP ratio (relatively stable, at just over 100% until 2007 – as calculated after all corrections). Thus, the country appeared to lose control of its public debt to GDP ratio, which already reached 127% of GDP in 2009 . In addition, being a member of the Eurozone, the country had essentially no autonomous monetary policy flexibility. Finally, there was an effect of controversies about Greek statistics (due the aforementioned drastic budget deficit revisions which lead to an increase in the calculated value of the Greek public debt by about 10%, i.e., a public debt to GDP of about 100% until 2007), while there have been arguments about a possible effect of media reports. Consequently, Greece was “punished” by the markets which increased borrowing rates, making impossible for the country to finance its debt since early 2010.
The above revisions were largely connected with the fact that in the years before the crisis Goldman Sachs, JPMorgan Chase, and numerous other banks had developed financial products which enabled the governments of Greece, Italy, and many other European countries to hide their borrowing. Dozens of similar agreements were concluded across Europe whereby banks supplied cash in advance in exchange for future payments by the governments involved; in turn, the liabilities of the involved countries were “kept off the books”. These conditions had enabled Greece as well as other European governments to spend beyond their means, while meeting the deficit targets set out in the Maastricht Treaty.
In May 2010, the Greece’s deficit was again revised and estimated to be 13.6% which was the second highest in the world relative to GDP, with Iceland in first place at 15.7% and the United Kingdom in third with 12.6%. Public debt was forecast, according to some estimates, to hit 120% of GDP in the same year, causing a crisis of confidence in Greece’s ability pay back loans.