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OECD Economic Surveys: Greece 2002

image of OECD Economic Surveys: Greece 2002

This 2002 edition of OECD's periodic review of Greece's economy examines recent economic developments, policies and prospects and includes special features on public expenditure and structural reform.

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Macroeconomic Developments and Prospects

The Greek economy has expanded continuously since 1993, with growth particularly strong and averaging almost 4 per cent during the five-year period starting in 1997, exceeding that of the European Union by more than 1 percentage point. The economy was barely affected by the downturn which hit most OECD countries in the second half of 2001 and appears well placed to outperform growth of the OECD area by a substantial margin this year and next. The current expansion was led by robust domestic demand, which entailed a widening of the current external deficit to more than 6 per cent of GDP in 2000 and 2001. Notwithstanding accelerating growth, consumer price inflation, which was still in two-digit rates in 1994, has been reduced to 2 to 3 per cent in 1999-2000, before edging up somewhat in 2001. Dark spots in an otherwise bright picture are low labour market participation and the high level of structural unemployment. The actual unemployment rate appears to have fallen in 2001, but remains the second highest in the OECD (Figure 1).

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