The Greek Economy in 2022: Numbers vs. Reality

The Greek Economy in 2022: Numbers vs. Reality

A report by the London-based newspaper The Economist published that Greece΄s economy ranked as the top performer among 34 countries for 2022. This is a significant development for a country that does not have a historical reputation for financial stability in the European Union. 

The five critical indicators for the ranking system used by The Economist’s report were GDP, consumer prices, inflation breadth, share prices, and net public debt as a GDP percentage. However, Eurostat, which tracks the EU’s economic performance, does not accurately depict the actual state of the Greek economy.

In 2022, the Greek-state Organization of Economic Cooperation and Growth (ΟΟΣΑ) showed a decrease in the public’s income. The average salary for 2022 rose monetarily by 1.5% compared to 2021, the stat that Eurostat used to show Greece’s rise in economic growth. Still, this indicator left influences of tax and inflation out of the equation. According to OOΣΑ, the average salary after tax was decreased by 7.4% due to a 9.4% inflation rate. People were not making more, but even less than the previous year, and further, the ΟΟΣΑ reported that in 2022 the poorest 20% of Greek households paid 43% of their income for rent.

The net public debt as a GDP percentage used by Eurostat also does not include Greece’s national debt or its accumulating interest. The national debt went from 36.3 billion to 392.3 billion in 2022 [rise of 36.3 billion driving the total debt to 392.3 billion]with added expenses such as 40 billion of private debt that has been added over the last four years. In addition, Greece is facing an external debt of 565 billion. Eurostat did not consider these indicators in their reporting on Greece’s net debt GDP going from 193.3% to 171.3% in 2022 (this stat could have been accurate, but it did not account for inflation, again.) 

In 2022, Greece showed a marginal 0.6% increase in employment, highlighting the tight labor market. What the Economist was holding onto to make their ranking came from Eurostat, and it only dealt with the first half of 2022 when the statistics were more favorable for Greece. “Thanks to super-strict lockdowns and a collapse in inbound tourism, much of Southern Europe was in dire straits a year ago. The region is due a decent year.” said the London-based newspaper. However, when inflation took its toll on Greece’s economy in the second half of the year, things did not pan out this way. There are quality, not quantitative, differences between Greece’s and the EU’s GDPs.  

Coming out of 2022, Eurostat shows a steady 7% inflation in the Eurozone for April of 2023 but only 4.5% for Greece due to tourism and the Mitsotakis government increasing the average salary to 10.92 euros (9.336 euros after tax). This wage is still not high enough to pay for living in Greece’s capital city, Athens, where by comparison, the cost of living is equally high as it is in Berlin. Coming from 2022, household buying strength is one spot before being last in the EU, with Bulgaria at the bottom of the list.And to top that off, the Bank of Greece calculated that there is a risk of relative poverty of 28.3% in Greece compared to the EU’s average of 16.8%.

In Greece in 2023, a country of cheap labor, an unmarried person with no kids earns about 15,119 euros after tax yearly, almost 10,000 euros less than the EU’s average, and a couple with two kids makes 33,044 euros after tax, 20.000 euros less than EU’s average of 53,397 euros. Moreover, collective agreement contracts, or employer-union contracts, were replaced by internal corporate agreements and individual contracts offering little to no employee benefit. In the entirety of the workforce, since 2022, there have been only 26 collective agreements in the private sector that affect only 25% of the workforce.

Eurostat’s numbers do not reflect the reality of the economic situation in Greece. Inflation and tax rates drastically impact the numbers, leaving little for the Greek population to benefit from besides the short-lived achievement of fictitious marginal increases in standing compared to the rest of the EU. 

The changes in the world economy have a lot in store for the Greek financial realm. With upcoming elections in 2023, the new government will have to face financial regulations, inflation, and increasing energy prices. Only time will tell if the gap between 2022’s winners and losers persists in 2023, as the Economist pointed out.



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