Report about Greece - Essay Example

Economic Report of Greece Summary This paper looks at the economic of the nation of Greece. This is done by looking at and analysing the GDP as well as the economic performance, the role played by macroeconomic policies and discusses the future prospects based on economic forecastsEconomic Report of GreeceThe Eurozone has been experiencing a drawback in the economy of the regions and it has begun rubbing of the growth of the region. Because of the use of the same currency but different regulations among the nations of the region, the member states of the union have experienced a debt crisis caused by the fallout of banks.

This has been the state of affairs affecting Greece. This paper looks at the turnaround experienced by Greece through analysis of the country’s GDP growth and its economic performance of the region.The GDP of Greece since 2008 has been on the rocks according to statistics provided by the World Bank (2014). The nation has experienced a mere 0.46 percent growth since this time with a low of -2.80 percent in 2010 (Tradingecomomics, 2014). Based on this, it is clear that the nation is facing an economic crisis.

Despite this there is, the nation is forecasted to do better as it is now picking up from the low it experienced as shown in the graph below. Figure 1: Greece GDP Growth Rate (Tradingecomomics, 2014)From the above, one can see that the GDP of the state has been taking a downward trend, but has picked up in the last few years. This can be attributed to the reforms placed in the employment sector. According to BBC’s Mark Lowen (2014), through the job cuts and firm restructures, the rate of unemployment has reached an all time high of 28 percent and contrasts the turnaround experienced by the nation in terms of economic growth.

Before, at least 50,000 jobs a year were made available to the citizens of the nation and the economy was growing at 5 percent annually. After the crash, the inverse was experienced with the rate of growth plummeting and the unemployment rate increasing rapidly.Figure 2: Greece Unemployment Rate (Tradingecomomics, 2014)In accordance with Herbert Grubel (2013), the problem resulted from the instability of prices. That is to say inflation caused by those in government. The problem began when wages were reduced, resulting in the leaders increasing the nominal wages in the public sector.

The higher wager resulted in the printing of more money, increasing the deficit experienced by the nation. All this resulted in inflation in the region and led to the collapse of the Greece economy and thus the increased rate of unemployment and the fall in the growth of the GDP.According to N. Roubini (As cited by George Alogoskoufis, 2012), the bailout paid by the European Union and the International Monetary Fund (IMF) was only delaying the inevitable instead of the government restructuring the public debt.

Him among other analyst have been advocating for the restructure of this debt. This would be achieved through reduction of appropriate primary surpluses through policies contributing to increased growth. This in turn reduces the gap between the growth rate and the interest rate being incurred by the state. This is a significant change in the macroeconomic policies being used to manage the economy of the state.As much as the citizens are experiencing lack of employment currently, it is forecasted that the trend will change.

By 2015, it is forecasted that the unemployment rate will be at 24.07 and 8.07 by 2020 with the GDP growth rate up to 2.75 percent annually in light of the forecast conducted by Trading Economics (2014). If the above suggestions are implemented by those in power, then the state of affairs are bound to turn around for the nation reducing the debt and the GDP ratio to a sustainable difference. Reference ListAlogoskoufis, G. (2012) pp 36-38. Greece’s sovereign debt crisis: retrospect and prospect.

 London School of Economics and Political Science, Hellenic Observatory.Grubel, H. (2013). A turning point for Greece and the euro. [Online] www.centralbanking.com. Available at: http://www.centralbanking.com/central-banking-journal/opinion/2294382/a-turning-point-for-greece-and-the-euro [Accessed 22 May. 2014].Lowen, M. (2014). Greece jobless rate hits new record. [online] BBC News. Available at: http://www.bbc.com/news/business-26171213 [Accessed 21 May. 2014].Tradingecomomics, (2014). Greece GDP Growth Rate.

[image] Available at: http://www.tradingeconomics.com/greece/gdp-growth [Accessed 21 May. 2014].Tradingecomomics, (2014). Greece Unemployment Rate. [image] Available at: http://www.tradingeconomics.com/greece/unemployment-rate [Accessed 22 May. 2014].Tradingeconomics, (2014). Greece GDP Growth Rate | Actual Value | Historical Data | Forecast. [online] Tradingeconomics.com. Available at: http://www.tradingeconomics.com/greece/gdp-growth [Accessed 21 May. 2014].WorldBank, (2014). GDP growth (annual %) | Data | Table.

[online] Data.worldbank.org. Available at: http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?page=1 [Accessed 21 May. 2014].