The economy of Greece is a developed economy consisting of a highly industrialized sector, a strong service sector, and a large agricultural sector. The Greek economy is the 28th largest in the world with a gross domestic product (GDP) of $203.8 billion in 2019. Greece’s economy has experienced significant fluctuations over the past three decades with periods of growth followed by recession and stagnation.
According to cheeroutdoor, the Greek industrial sector is highly diversified and accounts for around 25% of GDP. The main industries include tourism, shipping, food processing, textiles, metals and chemicals production. Greece is one of the world’s top tourist destinations due to its rich cultural heritage and stunning natural landscapes; tourism accounts for around 18% of GDP and provides an important source of foreign exchange earnings.
The services sector represents around 70% of GDP and includes financial services such as banking, insurance and stockbroking; professional services such as accounting, legal services and engineering; transport; communications; retailing; real estate; health care; education; culture and entertainment.
Agriculture represents around 5% of GDP although it has declined significantly over recent decades due to mechanization and urbanization. The main crops grown are wheat, maize, olives, tomatoes, grapes and oranges while livestock farming is also important for dairy products such as cheese as well as meat production from sheep or goats.
Greece’s economic performance in recent years has been affected by the global economic crisis which began in 2008 with the country experiencing several years of recession until 2016 when it returned to positive growth rates. In 2019 GDP grew by 1.9%, inflation was at 0.9% while unemployment remained high at 17%.
The government has implemented various reforms aimed at improving the competitiveness of the Greek economy such as reducing bureaucracy in business start-ups or tax administration processes, increasing public investment in research & development (R&D) projects or improving access to finance for SMEs through venture capital funds or state guarantees on bank loans.
In order to sustain economic growth going forward Greece needs to continue implementing reforms aimed at improving its business environment while also investing more heavily into research & development projects so that it can remain competitive in global markets with new products or services that offer higher value-added than traditional goods produced by other countries such as China or India.
Business and Economics
The country has for a long time had a weak economy. When entering EMU in 2001, the country reported a budget deficit for 1998 and 1999 of 2.5 percent and 1.6 percent of GDP, respectively, which later turned out to be inaccurate figures. The correct deficits were 4.1 and 3.4 percent, respectively, which would have meant that the country did not meet the limit value of a maximum of 3 percent of GDP in budget deficits that EMU has for entry. In 2004, the deficit fell to 7.9 percent, thanks largely to high costs for the summer Olympics. In the following years, the deficit declined until the international financial crisis hit the country in 2009, when the budget deficit reached 13.6 per cent of GDP. The high deficit, together with the country’s large indebtedness, caused an acute economic crisis in 2010, and the country received emergency loans of EUR 110 million. In 2011, the situation worsened further and EU leaders decided on a new support package of just over EUR 100 billion. The economic downturn has continued and in 2015 GDP had decreased by about a quarter compared to 2009.
Like many other countries, the Greek economy has gone from being agricultural-based to being dominated by the service sector, mainly trade, tourism and shipping. In comparison with other EU countries, the industry has quite a small impact on the country’s economy. Tourism has for a long time been an important factor in Greek business. Traditionally, almost half of all economic activity has taken place in the state sector, but in order to rectify a long-term budget deficit, an extensive privatization program was launched in 1998 and state ownership has been halved since then.
Agriculture still plays an important role in Greece’s business. About 64 percent of the country’s area is usable land, of which 17 percent is irrigated. About 25 percent of exports consist of food. However, topography, climate and soil constitute obstacles to efficient agriculture; just under a third of the country’s area is cultivated. Agriculture is mostly conducted in Thessaly and Macedonia but is also spread throughout the rest of the country. The cultivation units are small (80 percent is less than 4 ha) and the egg splitting is large. Added to this are old-fashioned farming methods, inadequate infrastructure and a significant water shortage. Some imports of agricultural products occur. Among the export products are tobacco, cotton, maize, olives, grapes, raisins, currants and citrus fruits. Other things include sugar beets, rice and figs.
In ancient times, Greece was largely wooded. As a result of multi-hundred-year-old chopping and overgrazing, the forest covers only about 30 percent of the area (mainly the high-lying parts), and a certain import of wood takes place. Since 1950, extensive forest planting programs have been implemented.
Greek fishing occurs both along the coasts and off the islands as well as in the South Atlantic and at Cape Verde. During the early 2000s, the fishing industry has declined as many fishermen have used EU grants to take old and small fishing boats out of use. The majority of the catch goes to domestic consumption. The previously important collection of laundry sponge has largely lost its importance.
The mining sector has only a marginal significance for the Greek economy. Company ownership is almost exclusively private. The most economically important mineral is bauxite (for aluminum production) and lignite, which is mainly mined in the southern part of the mainland and Macedonia respectively. In terms of volume, Greece is one of the leading world producers of perlite, pumice and bentonite. Iron, nickel and magnesite are also extracted. In addition, cement is produced.
Compared to most other European countries, energy consumption in Greece is relatively low. Of its own production, which accounts for a quarter of the total supply, lignite dominates, which is mainly mined in Ptolemais in Macedonia. Oil and natural gas are extracted from indigenous fields in the Aegean Sea. Of imported energy types, oil dominates, followed by a smaller amount of natural gas. An oil pipeline from Turkey was completed in 2007. The refineries are located in Athens and Corinth.
The contribution from renewable energy types, mainly biofuels, is about 6 percent (2009). The goal is to meet energy requirements of 40 percent by renewable sources in 2020. Water energy is extracted from the Acheloos and Pinios rivers, which open into the Ionian Sea. The industry uses about 15 percent of the available energy, while transport and other sectors account for the rest to about equal parts.
About a quarter of the country’s labor force is employed in industry. We have invested in the industrial sectors that are based partly on traditional craftsmanship and partly on domestic raw materials (however, import of industrial goods is necessary). These include the textile and clothing industry (with factories all over the country), the chemical industry (primarily the northern parts of the country with a large industrial complex in Thessaloniki), the metal industry (with extraction and processing plants in the Athens area in particular) and the food industry (in the Thessaloniki area, among others).). The formerly dominant small industry structure has been partially replaced by a concentration to larger units.
Severe environmental problems as a result of refineries, petrochemical plants and steelworks can be found today in the Athens area (with industries in particular Athens, Piraeus and Eleusis) and in the Gulf of Thermaikos at Thessaloniki.
Due to its energy-difficult situation, Greece has for a long time had a negative trade balance, with twice as much imports as exports. The most important export goods are food, industrial products, chemical products, ores and metals. Imports are dominated by workshop products, oil and transport. The most important trading partners are Germany, Italy and the Russian Federation. Trade with the Balkan countries has increased in recent years. The deficit in foreign trade is partly offset by extensive tourism and revenue from the merchant fleet, which, despite cuts, is still one of the largest in the world.
- COUNTRYAAH: Find major trading partners of Greece, including major exports and major imports with latest trade value and market share as well as growth rate.
Tourism and gastronomy
Abbreviated as GRC by abbreviationfinder.org, Greece is one of the larger countries where tourism plays a particularly important role for the economy and society. As a steward of an important part of the classical heritage of art and architecture, Greece has attracted tourists interested in ancient beauty and picturesque folk culture from the end of the 19th century. Since the 1970s, tourism has increasingly taken the form of mass tourism with growing elements of sun and bathing. This has consequences for good (many hotels and good communications) and evil (hard pressure on certain monuments and environments). The number of foreign tourists in 2010 was 15 million. Most come from Germany, the United Kingdom, Italy, France, the Netherlands and Albania. Tourism is estimated to contribute one fifth of GDP and employ an equal share of the labor force.
Note: the capital city of Greece is Athens with a population of 3,100,000, including the port city of Piraeus (2011 census). Other major cities include Thessaloniki with a population of 790,000, Patras with a population of 215,000, Heraklion with a population of 173,000, Larisa with a population of 163,000 (2011 Census).
Among the country’s many tourist destinations, the Acropolis in Athens is marked by the Parthenon, the Propylene, the Erechteion and in 2009 the museum, like Agora, with its excellent museum, and the tomb of Kerameikos at Dipylon opened. Also worth seeing is the stadium, which dates back to the Olympics in 1896. Byzantine Athens, with its fine medieval churches in the center and in some suburbs (especially the Dafni monastery), deserves attention as does the Byzantine Museum. The National Museum, with gold plaques from Mycenae and perhaps the world’s foremost collection of Greek sculpture and Greek vases, is also a great museum experience. Likewise, the Benaki Museum, which shows cultural connections from the long Ottoman period. The old town, Plaka, is characterized by boutiques, restaurants and entertainment venues.
The Greek island world with islands such as Corfu, Hydra, Samos, Kos, Mykonos, Rhodes and Crete is the center of pure recreational travel. Each island has its own character and often interesting sights at excursion distances (Delos next to Mykonos, the city of John the Knights in Rhodes, Knossos and Heraklion in Crete). World famous ancient sites such as Delphi, Mycenae and Olympia are part of many organized tours. In addition, slightly less touristy places such as Tiryn’s (near Argos), Sparta with the well-preserved Byzantine ruin town of Mistra, the Afaya Temple of Aegina, the Monastery of Hosios Lukas (with frescoes) are recommended. A special trip deserves Thessaloniki, with interesting churches and the gold treasure museum from the Macedonian ruling family’s gravesite in Vergina.
The food in Greece is characterized by pure flavors. Lamb, seafood, olive oil, lemon, fresh herbs, cheese and yogurt are some of the cornerstones of Greek food. The meal is often started with meze, small pieces of flavor consisting of e.g. olives, feta cheese, dolmades, (lamb tenderloin in wine leaves with lemon sauce), keftethakia (small meatballs), tarama salad (sauce with fish milk, milk, egg yolk, bread crumbs and lemon), melizanes salata (eggplant puree), tzatziki (yoghurt) and yoghurt marinated vegetables.
Soup is common, preferably of fish, but also of intestines or lamb’s feet (patsas), or the refreshing mashed potatoes, egg and lemon soup with rice.
The main course can consist of grilled fish (psari), flavored with oregano and lemon. Seafood or octopus are other options. Grilled lamb and lamb stew provide pleasant by-products in the form of kokoretsi, sausages on the liver, spleen and lungs, also a common sight on the mez table. Moussaka, lamb and eggplant gratin in béchamel sauce, is one of many dishes that show the Turkish influence in Greek cuisine. Most notably, however, is the dessert, which often consists of honey-dripping pastries, often filled with nuts or raisins. Halva and baklava are well-known examples, more traditionally Greek is mizithropitta me meli, a cake with soft cheese and honey.