Greece is a country in Southeast Europe, with a population of about 10.7 million people. Greece is known for its rich history, culture, and natural beauty, as well as its membership in the European Union (EU) and the eurozone. Greece is also known for its economic crisis, which began in 2009 and lasted for a decade, resulting in a severe recession, a debt crisis, and a bailout program.
However, after years of hardship and austerity, Greece is finally seeing signs of economic recovery and growth. Greece’s economy is recovering strongly in 2021 after a sharp contraction in 2020 due to the COVID-19 pandemic. The country’s GDP grew by 8.4% in 2021 and by 5.9% in 2022. Economic activity is expected to grow by 2.4% in 2023, before gradually moderating to 2.2% by 2025. The expansion is supported by the implementation of the Recovery and Resilience Plan (RRP) and a resilient labour market. The RRP is a €32 billion package of reforms and investments, funded by the EU’s Next Generation EU program, aimed at boosting Greece’s competitiveness, productivity, and sustainability. The labour market has shown remarkable resilience, with unemployment falling from 16.4% in 2020 to 14.6% in 2021, and employment increasing by 2.7% in 2021.
The Greek government has also implemented a number of reforms in recent years, such as privatizing state-owned assets and reducing government spending. These reforms have helped to improve Greece’s fiscal position and make the country more attractive to foreign investors. Greece’s budget deficit narrowed from 9.7% of GDP in 2020 to 3.9% of GDP in 2021, and its public debt ratio declined from 205.6% of GDP in 2020 to 199.6% of GDP in 2021. Greece’s current account balance improved from a deficit of 7.5% of GDP in 2020 to a surplus of 0.4% of GDP in 2021, reflecting an increase in exports and tourism. Greece’s foreign direct investment (FDI) inflows rose from €3.6 billion in 2020 to €5.2 billion in 2021, driven by sectors such as energy, infrastructure, and technology.
However, Greece still faces a number of challenges, such as high unemployment and public debt. The country is also vulnerable to external shocks, such as the war in Ukraine. The unemployment rate remains high, especially among the youth, and the labour market participation rate is low, indicating untapped potential. The public debt ratio is still very high, and the country’s credit rating is still below investment grade, limiting its access to market financing. The war in Ukraine poses a geopolitical risk for Greece, as it may affect its trade, tourism, and energy security.
Greece has made remarkable progress in overcoming its economic crisis and restoring its growth prospects. However, the country still needs to address its remaining challenges and risks, and to pursue further reforms and investments to enhance its long-term potential. Greece has the opportunity to capitalize on its strengths, such as its strategic location, its human capital, and its cultural heritage, and to seize the opportunities offered by the digital and green transitions. Greece has the potential to become a dynamic and prosperous economy, and a positive example for the rest of Europe.
