2015年-CEPS欧洲政策研究中心_Greeces_poor_growth_prospects_3页_347kb

Greece's Poor Growth Prospects Summary

Core Content

This document discusses the long-term growth challenges facing Greece, highlighting structural and demographic issues that hinder its ability to achieve sustainable economic recovery. The authors, Mikkel Barslund and Thomas Barnebeck Andersen, argue that Greece's economic prospects are poor despite recent debt relief efforts, due to a combination of demographic decline, a weak tradeable sector, and poor institutional quality.

Main Points

• Demographic Challenges:
  Greece is experiencing a significant decline in its working-age population (20-64 years), with an annual decrease of over 1%. This trend is expected to continue, creating a major challenge for economic growth.

  • The population decline is more severe than previously anticipated, as people of working age are leaving the country for better opportunities elsewhere.
  • Labour-market participation, especially among women, could help mitigate this issue, but the short-term effect on growth is limited.
  • Immigration could alleviate demographic pressures, but its effectiveness depends on successful integration of third-country nationals into the workforce.

• Economic Structure:

  • Greece is a small closed economy with a limited tradeable sector, which is not a strong driver of growth.
  • The non-tradeable sector (services, construction) has been the primary source of growth in the decade before the crisis.
  • Since the crisis, the tradeable sector has contracted more significantly than the non-tradeable sector, indicating structural weaknesses.
  • The tradeable sector includes raw materials and global maritime services, which contribute little value to the domestic economy.
  • Exports are not sensitive to domestic price and wage changes, meaning that further devaluation is unlikely to boost economic growth.

• Institutional Quality:

  • Greece ranks poorly in institutional quality, particularly in the World Bank's Doing Business report (26th out of 28 EU member states in 2015).
  • It is also at the bottom of the Worldwide Governance Indicators (WGI) among EU countries, with low scores across all six sub-indicators.
  • Despite reforms, institutional weaknesses persist and are a major obstacle to long-term prosperity.

• Human Capital:

  • Educational attainment levels for 25-54 year olds are only slightly below the EU average.
  • However, PISA results show Greece performing poorly compared to other OECD countries, especially in the areas of reading, mathematics, and science.
  • Progress in PISA scores since 2003 has been slow, indicating a lack of improvement in educational quality.

Key Information

• Population Decline:

  • Annual decrease in working-age population: >1%
  • Projected period: 2013–2040
  • Demographic growth differential: 1.75%
  • Out-migration of working-age individuals exacerbates the decline.

• Economic Growth Drivers:

  • Pre-crisis growth was driven by the non-tradeable sector.
  • Tradeable sector contraction is more severe, with a 28% decline from 2009 to 2013.
  • Exports are not responsive to domestic price and wage adjustments, limiting the effectiveness of devaluation as a policy tool.

• Institutional and Human Capital Weaknesses:

  • Greece has poor institutional quality, ranked 26th in the EU in the Doing Business report.
  • PISA results (2012) place Greece among the worst-performing OECD countries in education.

Conclusion

The authors conclude that even with substantial debt relief, Greece is unlikely to experience significant economic growth in the foreseeable future. The combination of demographic decline, weak tradeable sector, poor institutional quality, and low human capital development creates a challenging environment for sustainable growth. These factors suggest that Greece's path to recovery will be difficult and require comprehensive structural reforms.