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Greece vs. Turkey

Economy

GreeceTurkey
Economy - overview

Greece has a capitalist economy with a public sector accounting for about 40% of GDP and with per capita GDP about two-thirds that of the leading euro-zone economies. Tourism provides 18% of GDP. Immigrants make up nearly one-fifth of the work force, mainly in agricultural and unskilled jobs. Greece is a major beneficiary of EU aid, equal to about 3.3% of annual GDP.

The Greek economy averaged growth of about 4% per year between 2003 and 2007, but the economy went into recession in 2009 as a result of the world financial crisis, tightening credit conditions, and Athens' failure to address a growing budget deficit. By 2013, the economy had contracted 26%, compared with the pre-crisis level of 2007. Greece met the EU's Growth and Stability Pact budget deficit criterion of no more than 3% of GDP in 2007-08, but violated it in 2009, when the deficit reached 15% of GDP. Deteriorating public finances, inaccurate and misreported statistics, and consistent underperformance on reforms prompted major credit rating agencies to downgrade Greece's international debt rating in late 2009 and led the country into a financial crisis. Under intense pressure from the EU and international market participants, the government accepted a bailout program that called on Athens to cut government spending, decrease tax evasion, overhaul the civil-service, health-care, and pension systems, and reform the labor and product markets. Austerity measures reduced the deficit to 1.3% in 2017. Successive Greek governments, however, failed to push through many of the most unpopular reforms in the face of widespread political opposition, including from the country's powerful labor unions and the general public.

In April 2010, a leading credit agency assigned Greek debt its lowest possible credit rating, and in May 2010, the IMF and euro-zone governments provided Greece emergency short- and medium-term loans worth $147 billion so that the country could make debt repayments to creditors. Greece, however, struggled to meet the targets set by the EU and the IMF, especially after Eurostat - the EU's statistical office - revised upward Greece's deficit and debt numbers for 2009 and 2010. European leaders and the IMF agreed in October 2011 to provide Athens a second bailout package of $169 billion. The second deal called for holders of Greek government bonds to write down a significant portion of their holdings to try to alleviate Greece’s government debt burden. However, Greek banks, saddled with a significant portion of sovereign debt, were adversely affected by the write down and $60 billion of the second bailout package was set aside to ensure the banking system was adequately capitalized.

In 2014, the Greek economy began to turn the corner on the recession. Greece achieved three significant milestones: balancing the budget - not including debt repayments; issuing government debt in financial markets for the first time since 2010; and generating 0.7% GDP growth — the first economic expansion since 2007.

Despite the nascent recovery, widespread discontent with austerity measures helped propel the far-left Coalition of the Radical Left (SYRIZA) party into government in national legislative elections in January 2015. Between January and July 2015, frustrations grew between the SYRIZA-led government and Greece’s EU and IMF creditors over the implementation of bailout measures and disbursement of funds. The Greek government began running up significant arrears to suppliers, while Greek banks relied on emergency lending, and Greece’s future in the euro zone was called into question. To stave off a collapse of the banking system, Greece imposed capital controls in June 2015, then became the first developed nation to miss a loan payment to the IMF, rattling international financial markets. Unable to reach an agreement with creditors, Prime Minister Alexios TSIPRAS held a nationwide referendum on 5 July on whether to accept the terms of Greece’s bailout, campaigning for the ultimately successful "no" vote. The TSIPRAS government subsequently agreed, however, to a new $96 billion bailout in order to avert Greece’s exit from the monetary bloc. On 20 August 2015, Greece signed its third bailout, allowing it to cover significant debt payments to its EU and IMF creditors and to ensure the banking sector retained access to emergency liquidity. The TSIPRAS government — which retook office on 20 September 2015 after calling new elections in late August — successfully secured disbursal of two delayed tranches of bailout funds. Despite the economic turmoil, Greek GDP did not contract as sharply as feared, boosted in part by a strong tourist season.

In 2017, Greece saw improvements in GDP and unemployment. Unfinished economic reforms, a massive non-performing loan problem, and ongoing uncertainty regarding the political direction of the country hold the economy back. Some estimates put Greece’s black market at 20- to 25% of GDP, as more people have stopped reporting their income to avoid paying taxes that, in some cases, have risen to 70% of an individual’s gross income.

Turkey's largely free-market economy is driven by its industry and, increasingly, service sectors, although its traditional agriculture sector still accounts for about 25% of employment. The automotive, petrochemical, and electronics industries have risen in importance and surpassed the traditional textiles and clothing sectors within Turkey's export mix. However, the recent period of political stability and economic dynamism has given way to domestic uncertainty and security concerns, which are generating financial market volatility and weighing on Turkey’s economic outlook.

Current government policies emphasize populist spending measures and credit breaks, while implementation of structural economic reforms has slowed. The government is playing a more active role in some strategic sectors and has used economic institutions and regulators to target political opponents, undermining private sector confidence in the judicial system. Between July 2016 and March 2017, three credit ratings agencies downgraded Turkey’s sovereign credit ratings, citing concerns about the rule of law and the pace of economic reforms.

Turkey remains highly dependent on imported oil and gas but is pursuing energy relationships with a broader set of international partners and taking steps to increase use of domestic energy sources including renewables, nuclear, and coal. The joint Turkish-Azerbaijani Trans-Anatolian Natural Gas Pipeline is moving forward to increase transport of Caspian gas to Turkey and Europe, and when completed will help diversify Turkey's sources of imported gas.

After Turkey experienced a severe financial crisis in 2001, Ankara adopted financial and fiscal reforms as part of an IMF program. The reforms strengthened the country's economic fundamentals and ushered in an era of strong growth, averaging more than 6% annually until 2008. An aggressive privatization program also reduced state involvement in basic industry, banking, transport, power generation, and communication. Global economic conditions and tighter fiscal policy caused GDP to contract in 2009, but Turkey's well-regulated financial markets and banking system helped the country weather the global financial crisis, and GDP growth rebounded to around 9% in 2010 and 2011, as exports and investment recovered following the crisis.

The growth of Turkish GDP since 2016 has revealed the persistent underlying imbalances in the Turkish economy. In particular, Turkey’s large current account deficit means it must rely on external investment inflows to finance growth, leaving the economy vulnerable to destabilizing shifts in investor confidence. Other troublesome trends include rising unemployment and inflation, which increased in 2017, given the Turkish lira’s continuing depreciation against the dollar. Although government debt remains low at about 30% of GDP, bank and corporate borrowing has almost tripled as a percent of GDP during the past decade, outpacing its emerging-market peers and prompting investor concerns about its long-term sustainability.

GDP (purchasing power parity)$319.334 billion (2019 est.)

$313.469 billion (2018 est.)

$307.521 billion (2017 est.)

note: data are in 2010 dollars
$2,371,374,000,000 (2019 est.)

$2,349,836,000,000 (2018 est.)

$2,282,304,000,000 (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate1.87% (2019 est.)

1.91% (2018 est.)

1.44% (2017 est.)
0.98% (2019 est.)

3.04% (2018 est.)

7.54% (2017 est.)
GDP - per capita (PPP)$29,799 (2019 est.)

$29,206 (2018 est.)

$28,594 (2017 est.)

note: data are in 2010 dollars
$28,424 (2019 est.)

$28,545 (2018 est.)

$28,141 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 4.1% (2017 est.)

industry: 16.9% (2017 est.)

services: 79.1% (2017 est.)
agriculture: 6.8% (2017 est.)

industry: 32.3% (2017 est.)

services: 60.7% (2017 est.)
Population below poverty line17.9% (2018 est.)14.4% (2018 est.)
Household income or consumption by percentage sharelowest 10%: 1.7%

highest 10%: 26.7% (2015 est.)
lowest 10%: 2.1%

highest 10%: 30.3% (2008)
Inflation rate (consumer prices)0.2% (2019 est.)

0.6% (2018 est.)

1.1% (2017 est.)
15.4% (2019 est.)

16.2% (2018 est.)

11.1% (2017 est.)
Labor force4 million (2020 est.)25.677 million (2020 est.)

note: this number is for the domestic labor force only; number does not include about 1.2 million Turks working abroad, nor refugees
Labor force - by occupationagriculture: 12.6%

industry: 15%

services: 72.4% (30 October 2015 est.)
agriculture: 18.4%

industry: 26.6%

services: 54.9% (2016)
Unemployment rate17.3% (2019 est.)

19.34% (2018 est.)
13.68% (2019 est.)

11% (2018 est.)
Distribution of family income - Gini index34.4 (2017 est.)

35.7 (2011)
41.9 (2018 est.)

43.6 (2003)
Budgetrevenues: 97.99 billion (2017 est.)

expenditures: 96.35 billion (2017 est.)
revenues: 172.8 billion (2017 est.)

expenditures: 185.8 billion (2017 est.)
Industriestourism, food and tobacco processing, textiles, chemicals, metal products; mining, petroleumtextiles, food processing, automobiles, electronics, mining (coal, chromate, copper, boron), steel, petroleum, construction, lumber, paper
Industrial production growth rate3.5% (2017 est.)9.1% (2017 est.)
Agriculture - productsmaize, olives, wheat, milk, peaches/nectarines, oranges, tomatoes, grapes, milk, potatoesmilk, wheat, sugar beet, tomatoes, barley, maize, potatoes, grapes, watermelons, apples
Exports$92.925 billion (2019 est.)

$88.511 billion (2018 est.)

$81.196 billion (2017 est.)
$310.671 billion (2019 est.)

$296.288 billion (2018 est.)

$271.866 billion (2017 est.)
Exports - commoditiesrefined petroleum, packaged medicines, aluminum plating, computers, cotton (2019)cars and vehicle parts, refined petroleum, delivery trucks, jewelry, clothing and apparel (2019)
Exports - partnersItaly 10%, Germany 7%, Turkey 5%, Cyprus 5%, Bulgaria 5% (2019)Germany 9%, United Kingdom 6%, Iraq 5%, Italy 5%, United States 5% (2019)
Imports$94.597 billion (2019 est.)

$91.798 billion (2018 est.)

$85.092 billion (2017 est.)
$258.385 billion (2019 est.)

$272.933 billion (2018 est.)

$291.523 billion (2017 est.)
Imports - commoditiescrude petroleum, refined petroleum, packaged medicines, cars, ships (2019)gold, refined petroleum, crude petroleum, vehicle parts, scrap iron (2019)
Imports - partnersGermany 11%, China 9%, Italy 8%, Iraq 7%, Russia 6%, Netherlands 5% (2019)Germany 11%, China 9%, Russia 9%, United States 5%, Italy 5% (2019)
Debt - external$484.888 billion (2019 est.)

$478.646 billion (2018 est.)
$438.677 billion (2019 est.)

$454.251 billion (2018 est.)
Exchange rateseuros (EUR) per US dollar -

0.82771 (2020 est.)

0.90338 (2019 est.)

0.87789 (2018 est.)

0.885 (2014 est.)

0.7634 (2013 est.)
Turkish liras (TRY) per US dollar -

7.81925 (2020 est.)

5.8149 (2019 est.)

5.28905 (2018 est.)

2.72 (2014 est.)

2.1885 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt181.8% of GDP (2017 est.)

183.5% of GDP (2016 est.)
28.3% of GDP (2017 est.)

28.3% of GDP (2016 est.)
Reserves of foreign exchange and gold$7.807 billion (31 December 2017 est.)

$6.026 billion (31 December 2015 est.)
$107.7 billion (31 December 2017 est.)

$106.1 billion (31 December 2016 est.)
Current Account Balance-$3.114 billion (2019 est.)

-$6.245 billion (2018 est.)
$8.561 billion (2019 est.)

-$20.745 billion (2018 est.)
GDP (official exchange rate)$209.79 billion (2019 est.)$760.028 billion (2019 est.)
Taxes and other revenues48.8% (of GDP) (2017 est.)20.3% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)0.8% (of GDP) (2017 est.)-1.5% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 35.2%

male: 33.5%

female: 37.2% (2019 est.)
total: 25.2%

male: 22.4%

female: 30.3% (2019 est.)
GDP - composition, by end usehousehold consumption: 69.6% (2017 est.)

government consumption: 20.1% (2017 est.)

investment in fixed capital: 12.5% (2017 est.)

investment in inventories: -1% (2017 est.)

exports of goods and services: 33.4% (2017 est.)

imports of goods and services: -34.7% (2017 est.)
household consumption: 59.1% (2017 est.)

government consumption: 14.5% (2017 est.)

investment in fixed capital: 29.8% (2017 est.)

investment in inventories: 1.1% (2017 est.)

exports of goods and services: 24.9% (2017 est.)

imports of goods and services: -29.4% (2017 est.)
Gross national saving9.9% of GDP (2019 est.)

8.8% of GDP (2018 est.)

8.9% of GDP (2017 est.)
26% of GDP (2019 est.)

27.7% of GDP (2018 est.)

26% of GDP (2017 est.)

Source: CIA Factbook