The good news is that Greece has reported a balance of payment surplus for 2013 – in short, the nation has earned more than it spent. The surplus came in at €1.24 billion, marking a significant improvement on 2012 which saw a deficit of €4.6 billion. The improved financial situation has been credited in part to a significant boost in the tourism sector, the Greek economy’s dominant sector, which saw receipts rise by 15% - possibly a result of better times across the EU as a whole. Receipts from the tourism sector for 2013 came in at a record €12 billion.
The figure was bolstered by a decline in the cost of imports and an increase in exports, but the balance of trade (the value of exported goods minus imported goods) stands at €2.4 billion. Imports fell by 4.5% whereas the value of (non-fuel) exports rose by 2.1% to €14.2 billion. The squeeze on Greek wages has helped to improve worker productivity. In addition, Greek’s creditors agreed to half interest payments on the bailout to some €6 billion for 2013 – those who imagined that the IMF/EU bailout was an act of pure charity, take note!
Greece has been in recession for six straight years, but the nation is hopeful of finally returning to growth in 2014. Unemployment in Greece remains the highest in the EU with 28% of the workforce idle – well over twice the Eurozone average which is itself at near record levels. Austerity measures imposed on Greece as conditions attached to the two EU/IMF bailouts have seen the size of the Greek economy shrink by 25% in four years as cuts and reforms have bitten deep.
The Greek problem can be expressed in a nutshell by the fact that this balance of payments surplus is the very first since records began to be kept in 1948. In every other year, the deficit had to be covered by generation of debt and from foreign investment in the nation. The government debt to GDP ratio peaked at 170.3 in 2012.