Despite being the most battered economy in the last decade prior to COVID-19, it is surprising that Greece, a country heavily dependent on tourism, has managed to recover from the effects of the pandemic. 

Comparison with European countries

One of the indicators that confirms this recovery is the GDP per capita. According to the Bank of Spain: “If we look at the evolution in per capita terms, we observe greater dynamism than in Spain from the economies of Greece, Italy and Portugal throughout the post-pandemic period (with growth rates of 10.9%, 6.8% and 3.9%, respectively), compared to the greater stagnation of GDP per capita in Germany, which experienced a decline of 1.6%”.

Why is it growing?

Greece’s economic recovery is partly due to the steady decline in unemployment, but also to the reduction in the working-age population. The latter factor does not seem to be the best way to achieve economic growth. 

GDP per capita is calculated by dividing total GDP by the number of inhabitants, which means that a simple reduction in the population can increase this value. Therefore, it is important to consider that the main factor behind the increase in GDP per capita in Greece is the decrease in population, which represents a worrying demographic scenario. 

This demographic situation is due to factors such as low birth rates and the emigration of young people. The birth rate in Greece is one of the lowest in the world, with less than 2 children per family. According to the Bank of Spain, the number of births per 1,000 people has been falling steadily since 2008. 

Emigration may be related to the fiscal measures taken to stabilize public finances, including cuts in public spending, tax increases and structural reforms. 

Despite the positive effects of economic growth, such as debt reduction, Greece is still working on the sustainability of its public debt. To address this challenge, the country has implemented measures such as debt restructuring, long-term bond issuance, and budget deficit reduction. 

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