A significant part of its orientation toward internationally tradable sectors that it had lost before the crisis has been regained by the Greek economy, but this change has not yet translated into a corresponding increase in real production.
In 2025 the country produced 10% less than it did in 2009 and 13% less than the peak of 2008.
This is the main conclusion of the new Policy Brief by KEFiM titled “The Greek production model 2000-2025”, authored by KEFiM research assistant Christos Loukas and KEFiM president Nikos Rombapas.
The study examines how the distribution of the country’s production across the main sectors of the economy changed over the last quarter century, using data from Eurostat.
Why the production model concerns us all:
- It determines how much real wealth the country can create and not simply how GDP is distributed among sectors.
- It directly affects the economy’s ability to support more and better-paid jobs.
- It is linked to the extent to which the country can achieve sustainable growth in incomes and living standards.
- Strengthening internationally tradable sectors matters only if it is accompanied by a real increase in production and not just by higher prices.
- A stronger and more productive economy is more resilient to future crises and external shocks.
The main findings of the study
In a quarter of a century, the Greek economy went through a full cycle of rise, collapse, and incomplete recovery. The production level of 2025 corresponds approximately to that of the years 2003-2004.
The major shift toward services had already taken place before the crisis. From 2009 until today, the shares of services, industry, and agricultural production have each changed by less than one GDP point.
The most significant change concerns the relationship between tradable and non-tradable activities. The shift toward the domestic market that had been recorded during the 2000s has now been fully reversed.
The largest share losses since 2009 are recorded in the broader public sector (-3.6 GDP points), construction (-2.7), and trade, transport, and tourism (-1.2). By contrast, gains are recorded, among others, by industry (+1.8), financial services (+1), agriculture (+0.7), and information technology (+0.5).
However, a large part of these changes reflects changes in relative prices and not in the volume of production. It is characteristic that agriculture and financial and professional services increased their share even though their real production is lower than in 2009.
Manufacturing is the clearest case of real productive strengthening: its share increased from 8.2% of GDP in 2009 to 9.1% in 2025 and its production volume is today 7% higher than in 2009.
A corresponding positive dynamic is recorded by information technology, communications, and media, which together with manufacturing constitute the two sectors that exceed 2009 levels in real production.
The study concludes that the adjustment during the crisis period changed relative prices in favor of internationally tradable activities, but this change alone was not enough to lead to a corresponding increase in production.
The next objective is for the shift that has already taken place in the composition of the economy to acquire stronger real productive content, through more investment, greater outward orientation, and structural reforms.
KEFiM president, Nikos Rombapas, stated:
“In recent years Greece has indeed turned toward the sectors that compete in international markets, but a large part of this shift is due to an increase in prices and not in production.
The next step is for this change in the composition of the economy to be grounded more firmly in a real strengthening of production. Manufacturing and information technology show that this can be done. We need more investment, more outward-looking businesses, and the continuation of reforms that can increase productivity and, ultimately, the country’s real income”.
*See KEFiM’s research on the right in the Accompanying Material column.