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Greece - Overview

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Introduction

Capital:: Athens
Area:: 132 km2
Total Population:: 11.093
Annual growth rate:: -0.00%
Density:: 86.00/km2
Urban population:: 62%
Population of Athens (3.216), Thessaloniki (798), Patras (190), Iraklion (150), Volos (120)
Official language: Greek
Other languages spoken: French and English.
Business language: Yes
Ethnic Origins:: Greek 93%, foreign citizens 7%.
Beliefs: Orhodox Christians: 98%
Muslims: 1.3%
Others: 0.7%.
Telephone codes:
To make a call from: 0
To make a call to: +30
Internet suffix:: .gr
Type of State::
Greece is a republic based on a parliamentary democracy. Greece (official name: Hellenic Republic) was a monarchy until 1974. Greece is a Constitutional State. However, a certain number of NGOs have communicated their concerns about immigrants and the members of religious minorities in particular. Foreign nationals can, usually, expect a fair trial in legal matters. There is a substantial level of corruption in the country, in particular among the police and in the business sector – corruption in Greece is the most widespread among the member countries of the European Union.
Type of economy::
High-income economy, OECD member
Tourism is the dominant sector; significant unofficial economy; very high deficit and debt ratio since the economic crisis

Economic overview

2013 was the sixth consecutive year of economic decline, with the Greek GDP shrinking by -4.2%. This was nevertheless an improvement on the previous year (-6%) and a return to positive numbers is expected in 2014.

The troika (IMF, EU, ECB) has continued to exert pressure on the Greek government and has forced it to reduce labour costs in an effort to increase the country's competitiveness. The conservative government has also amanged to restore public finances and register a surplus. The country's long-term rating has been increased by rating agencies which have seen the economy is returning to equilibrium. Prices begin to fall and consumption bottomed out. However, the debt has continued to rise and has reached historical levels (more than 176% of the GDP) and the privatisation programme and the job reduction plan for the public sector have encountered great difficulties. The government's key objective is still to reduce the budget deficit and the state debt and to improve the business climate in order to sustain economic recovery.

The country is facing a dramatic rise in unemployment, which now affects over a quarter of the workforce and more than 60% of people under the age of 25, as well as a proliferation of general strikes and other social protests against the austerity measures. The social-economic crisis has also been accompanied by a silent environmental crisis.

Main industries

Traditionally, the Greek economy has been based on agriculture. The sector represents 3% of the GDP and employs around 12% of the workforce. 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 government, industry has replaced agriculture as a second source of income after services, and accounts for around 20% of the GDP. The main sectors are: electronic goods, transport materials, clothing and construction. More specifically, Greece is the largest European ship owner.The tertiary sector accounts for nearly three quarters of the GDP and employs 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.

Foreign trade overview

Greece has an export-oriented economy, trade representing more than 50% of the GDP (WTO, average data for 2010-2012). Its main trading partners are the European Union (especially Italy and Germany) and the United States.

Structurally in deficit, the trade balance has improved since the beginning of the crisis due to the imports declining more quickly than exports. This trend should become more pronounced in 2014 given the expected resumption in exports, which increased by 2.5% in 2013.

FDI

The available data on FDIs in Greece should be taken with caution because they do not reflect the real situation. Compared to other countries of the European Union and the level of FDIs has been decreasing.

Despite the slight improvement in the country's economic situation, this trend should continue.

In addition to the exceptionally negative economic situation of the country, the high level of corruption and lack of transparency are the two main obstacles to the growth of FDIs.

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