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Greece Yavor Yanakiev Aleksandar Temelkov Today we will present: • • • • • • • • Geographic and Demographic Background Historical development GDP Growth and the Crisis Unemployment Inflation Current Account Trade Balance and Budget Deficit Monetary and Fiscal policy Geographic and Demographic Background • Population: 11,262,000 (2008) • Labor force 4.96 million (2008) • Labor force by occupation agriculture (12%) industry (20%) services (68%) - 2004 • Unemployment 8% (2008) Historical development • Impacts of the 1923 Treaty of Lausanne (enlarging population, new skills brought) • After World War II, Greece experienced the "Greek economic miracle"; GDP growth averaged 7% between 1950 and 1973. • The rapid economic growth was mainly due to the drastic devaluation of the drachma, which attracted foreign investment • Another key factor was the development of the tourism and the service sector in the country • Delors Package Number 2 (25 billion 1994-1999) infrastructure, training, etc. GDP Growth • GDP - $351.3 billion (2008) • GDP – Composition by sector agriculture: 3.2% industry: 20.6% services: 76.3% (2007) GDP And the Crisis • With the economic crisis striking with full strength, number of tourists is expected to plummet which will lower Greece’s economic growth • If the crisis hits countries like Turkey and Bulgaria hard, Greece will take huge losses as its main investment was directed to acquisition of banks in these countries • On the bright side, Greece is expected to be one of the few countries in EU with positive economic growth in 2009 Unemployment • Riots Dec 2008 • Forbs: rose to 9.4 percent in January from 8.9 percent in December resulting in 465,692 unemployed people. • Greece's conservative government to spend an additional euro2.5 billion ($3.3 billion) on job programs as the country's unemployment rate jumped. Inflation •1993 EMU •1994 ECB •2001 EURO Current Account • Olympic games 2004 • September 2007 • November 2008 Exports by Country Countries 12/2005 12/2006 12/2007 8.681,2 10.562,9 11.198,2 Germany 1.748,7 1.878,5 1.987,7 Italy 1.476,6 1.861,9 1.855,1 Cyprus 724,0 890,6 1.121,1 Bulgaria 817,0 1.052,5 1.115,6 United Kingdom 943,0 991,8 938,1 2.157,2 2.623,5 2.509,9 Turkey 754,1 848,0 620,4 Albania 348,1 373,6 452,9 FYROM 327,2 373,3 389,9 3.210,5 3.465,3 3.514,7 USA 736,3 725,8 692,4 United Arab Emirates 209,7 190,5 199,9 14.049,0 16.651,7 17.222,8 E.U. Europe (excluding E.U.) Other countries Total Source: National Statistical Service In million Euro Exports By Commodities Categories - Items 12/2005 12/2006 12/2007 3,3 3,6 4,6 2 FOOD PRODUCTS 1.409,6 1.636,2 1.577,5 3 FRUIT & VEGETABLES 1.082,5 1.198,2 1.305,8 4 BEVERAGES 132,0 135,1 148,1 5 TOBACCO 427,1 373,1 354,3 30,1 31,7 35,8 7 RAW MATERIALS & SEMI-FINISHED PRODUCTS 339,7 400,2 279,6 8 ORES & MINERALS 304,1 609,2 452,9 9 PETROLEUM PRODUCTS 1.311,7 2.148,5 2.080,5 10 INDUSTRIAL PRODUCTS 8.144,3 9.131,1 9.840,3 11 OTHER ITEMS 864,5 984,7 1.143,4 GRAND TOTAL 14.049,0 16.651,7 17.222,8 1 LIVESTOCK 6 LIVESTOCK FEED Imports and Trade Balance Budget Deficit • • • • • • EU regulations Reasons The public debt of Greece as to the end of 2008 exceeded 93% of GDP Greece violated the budget deficit rules of the European Union with deficit amounting to -3.4%- EU (2.5%) The public debt of Greece is expected to rise up to 105.6% of GDP until the end of 2009 Credit agencies constantly lower Greece’s credit rating, forcing it to borrow at higher interest rates which further increases its debt Monetary and Fiscal policy • EU with the ECB • Recent Changes in Government Fiscal Policy Thank you! We are open for questions…