September 25, 2023
The New York Times decided to celebrate Greece’s economy with an article headlined “Greece, battered a decade ago, is booming.” The piece touts a tourist and investment boom, which does seem to be a marked improvement for the economy after almost a decade of austerity.
Still, the case it makes is weaker than it may appear. It tells readers:
“The economy is growing at twice the eurozone average, and unemployment, while still high at 11 percent, is the lowest in over a decade.”
Since the eurozone growth rate for 2023 is projected to be 0.8 percent, growing twice as fast is a rather low bar. (The projected Greek growth rate of 2.6 percent is respectable.) The 11 percent unemployment rate is far higher than the rest of the European Union, which has a 5.9 percent unemployment rate (6.4 percent for the eurozone).
The recent growth in GDP should be put in a longer-term context. If we take the longer picture, Greece’s real per capita GDP on a purchasing power parity basis is projected to be $32,204 this year, which is more than 14 percent below its peak in 2008.
The media in the United States were highlighting the difficulty that people in the United States were having putting food on the table and paying rent in 2022 when real income was down by around 1.0 percent from pre-pandemic levels. The people in Greece are obviously doing better with their economy growing at a healthy pace than if it were not, but the data do not indicate they have much to celebrate.
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