Economic Research paper on Greece

Greece Economic

The objective

  • The objective
  • To establish the current economic status of Greece and how the three values (GDP, unemployment, and inflation) affect the overall economy of the country. It would look at the current status of the economy with regard to the three objectives and then give a conclusion on how these values and their current conditions have affected the economy.

Outline

Introduction

    1. Statement of the Problem
    2. Definition of Terms
    3. Theoretical Framework
    4. Methodology
      1. Type of Research
    5. Hypothesis
    6. Review of Related Literature
    7. Scope and Limitations
    8. Significance of the Study

Body

    1. Background of the Study
  1. Unemployment rate of Greece
  2. Greece inflation rate
  3. Greece GDP
    1. Presentation and Analysis of Data

Conclusion

    1. Concluding Statement
      1. Analytical Summary
      2. Thesis Reworded
    2. Recommendations

Values of Greece Economy

The continued mismanagement of the government’s spending has increased the negative effects that the sovereign debt predicament and the many international bailouts. The country still has problems with its rule of law evidenced in the weak enforcement of the property rights, pervasive corruption and tax evasion cases (Petrakēs). Despite the country’s effort to an environment that promotes business, its labor market has remained sluggish and inflexible to adjust to the realities of the market. The country’s economy which majorly depends on services, tourism and shipping has for the past six years been on the recession trend. The global creditors expect the economy to expand, but its employment is still the worst in the whole of euro zone.

Economists look at the country’s GDP to enable them measure and determine the value of its overall services and goods at market price.GDP determines the interest rates which affect borrowing and is also the indicator of the country’s economic strength. Unemployment affects the economy in that the government cannot collect tax from the unemployed hence it would increase its borrowing. The unemployed have low spending power and the industries which could drive the economy are seriously affected. High inflation rate makes the government to pay more on the debts it has from other agencies and unions.

Unemployment

Unemployment refers to the people who are actively looking for job but are unemployed. The unemployment rate of Greece as of July 2015 was 25 percent. This was the same percentage as that of June. The average unemployment rate is 14.82 since 1998 up to 2015 with the highest rate reaching 27.90 in September of 2013.the lowest rate was recorded in May, 2008 at 7.30 percent (Prof Michael and Prof Theodore). The unemployment rate of Greece measure the number of Greece people who are actively searching for employment, it therefore leaves out those who are not employed but are not looking for employment

The unemployment rate has mostly the young people between the ages of 15 to 24 years. About 48.6 percent country’s young citizens were unemployed. The unemployment rate between genders is different with male experiencing a decrease in the unemployment from 23.3 to 21.5 in July of 2014. The jobs are always hard to come by especially for the young people. The youth unemployment is so high that it surpasses the quarter of citizens who are also unemployed.

Generally, young people are never lucky when it comes to job search due to their lack of experience, career management and a mismatch between the skills they learned and those demanded by the labor market (Petrakēs). These young people also lack access to professional platforms and networks where they could meet with potential employers. Some experts have contributed this high unemployment rate to austerity, which is the impact of reduced government spending, reduced wages, privatization, and reduced employment protection among others.

More than half of the citizens who are below 25 years are not in the jobs. The western side of Greece has some regions with youth unemployment standing at over 60%.this factor is further worsened by the fact that long-term unemployment is still high in the country. When these young people are out of employment for a long period of time then it has some consequences on them. People who have stayed long out of employment are less employable as compared to others who have not been unemployed for long.

A report by the European parliament discovered that in every three young citizens, one has been jobless for over one year. These unemployed youths would end up eventually losing their health insurance when they stay unemployed for two years (Petrakēs). The number of youth who are neither employed, in education or training has in the recent past has nearly doubled compared to the number of the same NEET (Neither I employment, education, training).this number had shot up to 20% from 11% in the 2013.the number is so high that it nearly marches the target for Europe in 2020.

Many people who are lucky to get employed have to wait for long periods after graduating to get a job. The reason for the prolonged transition period has been attributed to factors such as the mismatch of skills and job, lack of cooperation between companies and education institutions. Unlike other parts of Europe where people between ages of 25-29 are employed, Greece has witnessed a direct opposite with many of its graduates remaining jobless and end up in the NEET situation.

Inflation

Inflation refers to a state where the country’s currency falls in value while the general price of products and services rises. In the last three years, Greece has been going through deflation as pension and wage cuts as well as the global recession took toll on the Greece household income (Prof Michael and Prof Theodore). Some of the areas that have experienced downward pressure are housing, transport, clothing and footwear, household equipment. By contrast, other items like accommodation and the cost of food went up by 1.8% and 3.7% respectively. The total inflation average was estimated to 8.84 between 1960-2015.this came to the highest percentage in 1974 of 33.70% and lowest in November 2013 at -2.90.

Greece places much importance to the items in the categories non-alcoholic and food (17%), housing (12%), transport (13%), restaurants, coffee shops and hotels (11%), footwear and clothing (9%), culture and recreation (5%) and health at 7%. The remaining percentage is taken by education, tobacco, alcoholic beverages, and other services and goods.

GDP

GDP refers to the overall value of all the country’s services and goods.GDP does not include income from foreign remittance but only income from the workforce and citizens of the country. The economic freedom of Greece is ranked 130th economy in the world. The economic freedom of the country scored 54.0, which declined by almost 1.7 of last year’s score (Lynn). The decline is mainly attributed to reduction of government spending and the gradual decline in the labor freedom, business freedom and fiscal freedom. Among the 43 European countries, Greece ranks 40th with are score below the regional and world averages. The country’s economic freedom fallen by 6.3 points and has moved from its original category of “moderately free” and is now in the category of “mostly unfair”

The recession had hit the country so had, that its GDP came down from94% in 2009 to about 72% five years later (2014). After the 2008 recession, the country found itself in a massive budget deficit (Lynn). The economic crisis had caused the Greece to have a deep 8% in its industrial production in 2010-2011.The country’s building sector declined by 73%, its turn over in major retail sales came down by 9%

Conclusion

Greece has gone through some difficulties and may have to endure more to face the future predicaments like the one it is now. However, there is still hope for the people of Greece as their economy has started some gradual improvements. The economic growth which was predicted to grow at the rate of -8.0 surprised everyone when it recorded a small but positive figure.

High unemployment and inflation rate is harmful to the country’s economy as it affects the county’s ability to invest, diversify and even save for important rejects. The low GDP means that the value of the services and products are low and therefore lack a competitive edge in the international market. The country therefore reduces its avenues of earning foreign exchange.

Works Cited

Lynn, Matthew. Bust: Greece, the Euro and the Sovereign Debt Crisis. Chichester: Wiley, 2010. Print.

Petrakēs, Panagiotis. The Greek Economy and the Crisis: Challenges and Responses. Berlin: Springer, 2012. Internet resource

Petrakēs, Panagiotis. The Rebirth of Greek Labor Market: Building Toward 2020 Following the Global Financial Meltdown. , 2014. Internet resource

Prof Michael, Mitsopoulos and Prof Theodore, Pelagidis. Prof. Understanding the Crisis in Greece: From Boom to Bust. Palgrave Macmillan, Basingstoke, GB, 2011. Print.