Greece economy shows resilience amid structural shifts and market volatility

The Greek economy is navigating a complex landscape characterized by structural shifts and market volatility. A study by the London School of Economics (LSE) Greek Observatory describes the nation as a ‘café economy,’ noting an over-reliance on the accommodation and food services sector (AFSA) which has led to disproportionate growth in tourism and a decline in overall economic productivity.

Despite international market turbulence and rising yields on European sovereign bonds, Greek markets have shown resilience. The Athens Stock Exchange recently saw a recovery driven by the banking sector, following a period of losses. Analysts note that while the Greek debt-to-GDP ratio remains high, the structure of the public debt—featuring long-term maturities and stable financing costs—mitigates immediate refinancing pressures. The annual debt service cost is estimated at approximately 1.43%, or 1.94% when including EFSF interest.

Greece is also pursuing higher credit ratings, with government sources aiming for an ‘A-’ rating by 2030 and ‘A+’ by 2034. Achieving these milestones requires addressing chronic issues such as the current account deficit, strengthening the productive base, and improving the speed of the judicial system. Additionally, Greece is increasingly recognized as a regional middle power due to its strategic position in the Eastern Mediterranean and its role in maritime security operations.