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1 | P a g e International Business Country Analysis Greece Submitted By: Group 1 A

International Business

Country Analysis

Greece

Submitted By: Group 1

A

Sai Sadhana

-

17A1HP224

Ryan Raut

-

17A1HP271

N

Manasa

-

17A1HP322

Kumar Karan Gupta

-

17A1HP344

Yaswanth Devarapalli

-

17A1HP240

Vanaparla Praneeth Lakshmi Sowmya

-

17A1HP201

Submitted To: Prof. Steven Raj

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Table of Contents

1.Gross domestic product

3

2.Demography

6

3.CPI

8

4.Monetary and finance

11

5.Public Finance

12

6.Index of Industrial Production (IIP)

16

7.Balance of Trade

19

8.Top exports, imports and partners

19

9.External Indicators

22

10.Policy rates

22

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Gross Domestic Products

Economic Activity

The efforts made by the administration has shown an impressive stabilisation after the crisis and the reform efforts are finally paying off. The Hellenic Republic is growing again and has increased from -0.42% (2016Q1) to 2,3% for the first quarter of 2018 and has increased by 0.3% in comparison to 2% for (2017 Q4). Although the Gross Capital Formation has been very unstable for the last 8 quarters going up and down, the major contribution in the increase in growth rate has been due to the increase in net exports at 3.53% which is the highest in the last 22 quarters strengthening the business and manufacturing sector in the country.

10.00%

Contribution to GDP % Quaterly 5.00% 0.00% -5.00% -10.00% -15.00% Percentage
Contribution to GDP % Quaterly
5.00%
0.00%
-5.00%
-10.00%
-15.00%
Percentage

-20.00%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

 

Year

 
  Household General Government Net Exports GCF GDP

Household

  Household General Government Net Exports GCF GDP

General Government

  Household General Government Net Exports GCF GDP

Net Exports

  Household General Government Net Exports GCF GDP

GCF

  Household General Government Net Exports GCF GDP

GDP

Growth over the last decade

The growth rate of Greece has shown impressive stabilisation after the severe crisis that started from 2009 quarter 1 with the GDP falling to -6.73%. The GDP fell at around -10% in the year 2011, the lowest among the decade. The average GDP growth rate over the last decade is around -3% due to the debt burdens but started to improve over the years and increased for the

5 th quarter in a row for the first time since 2006.The highest GDP growth is observed in 2018 quarter 1 at 2.3%, which is still below the global GDP growth rate.

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4.00%

GDP Growth Rate % Annual

2.00% 0.00% -2.00% -4.00% -6.00% -8.00% -10.00% -12.00% 2009 2010 2011 2012 2013 2014 2015
2.00%
0.00%
-2.00%
-4.00%
-6.00%
-8.00%
-10.00%
-12.00%
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Average
GDP
Domestic Demand

As it can be observed from the chart below, the domestic demand from government is negative and only contribution comes from fixed capital formation and private households. And the GDP is also driven by these two. Even the fixed capital formation and private households also displays a highly varying trend for the last 8 quarters. Greece need to focus more on manufacturing so as to increase the domestic demand.

Domestic Demand

5% 0% -5% -10% Percentage
5%
0%
-5%
-10%
Percentage

-15%

Domestic Demand 5% 0% -5% -10% Percentage -15% 2009 2010 Private COnsumption 2011 2012 2013 2014

2009

2010

Private COnsumption

2011

2012

2013

2014

Year

2015

2016

2010 Private COnsumption 2011 2012 2013 2014 Year 2015 2016 Government Consumption Gross Fixed Capital Formation

Government Consumption

COnsumption 2011 2012 2013 2014 Year 2015 2016 Government Consumption Gross Fixed Capital Formation 2017 2018

Gross Fixed Capital Formation

2017 2018 GDP
2017
2018
GDP

In recent news, after nearly a decade of tough negotiations and reliance on creditors, Greece exited its third bailout program on 21 August, standing on its own two feet for the first time in eight years. A final disbursement of EUR 15 billion from the European Stability Mechanism was released at the start of August and the country has a solid cash buffer, large enough to cover its financing for around 22 months.

Tourism and other export-oriented activities are showing a steady improvement which supports the labour market and trickles down slowly to the rest of the economy.

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Net Export of Goods and Services

The net exports have come to an all-time high for the past 23 quarters at 3.53% for quarter 1 of 2018. Greece needs to keep exporting more and reduce the imports in order to improve the GDP further.

Net Exports of Goods and Services % ann 6% 4% 2% 0% -2% -4% -6%
Net Exports of Goods and Services % ann
6%
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Net exports
Exports
Imports
GDP Per Capita
GDP VS GDP per capita growth rate
6.0
6.0
5.0
4.0
4.0
3.0
2.0
2.0
1.0
0.0
0.0
-1.0
-2.0
-2.0
-3.0
-4.0
-4.0
-5.0
-6.0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Growth in GDP
Growth in GDP per capita

The growth in GDP per capita has almost been similar with the growth in real GDP with a minute difference of a few percentage. The trend has been very fluctuating from 2010- 2017. The GDP per capita increased from -3.7% (2015 Q1) to 2.5% in 2016 and again fell to ---2.8% for 2017.

The total GDP has decreased from 250459 million Euros in 2010 to 236226 in 2017 and the GDP Per Capita has decreased from 22524 to 21937 Euros per person from 2010 to 2017.

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Total GDP in Million Euros GDP Per capita in Euros 250000 22500.0 245000 22000.0 240000
Total GDP in Million Euros
GDP Per capita in Euros
250000
22500.0
245000
22000.0
240000
21500.0
235000
21000.0
230000
225000
20500.0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

255000

GDP VS GDP Per Capita

23000.0

DEMOGRAPHY

Population Pyramid:

The dotted line indicates the excess male or female population in certain age groups. The data are in thousands or millions and represent the population in each age group.

or millions and represent the population in each age group. The pyramid represents ratio of males

The pyramid represents ratio of males and females of different age groups. In 1950, the younger population is more than the adults and older population whereas in 2017, the middle age population (age: 40 50 years) is more than the rest of the population.

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7 | P a g e Source: United Nations, Department of Economic and Social Affairs, Population

Source: United Nations, Department of Economic and Social Affairs, Population Division (2017). World Population Prospects: The 2017 Revision

In 2050, the number of older populations multiplied while in 2100, male to female ratio is more or less the same.

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Total Population Vs Working Population:

TOTAL POPULATION VS TOTAL WORKING POPULATION

10768193 4397200 Jan-17 1027100 3752700 10783748 4408300 Jan-16 1130900 3673600 10858018 4438900 Jan-15
10768193
4397200
Jan-17
1027100
3752700
10783748
4408300
Jan-16
1130900
3673600
10858018
4438900
Jan-15
1197000
3610700
10926807
4471500
Jan-14
1274400
3536300
11003615
4466000
Jan-13
1330400
3513200
11086406
4454700
Jan-12
1195100
3695000
11123392
4436700
Jan-11
881800
4054400
11119289
4370300
Jan-10
639400
4389800
11094745
4370300
Jan-09
484700
4556000
11060937
4390400
Jan-08
387900
4610500
11036008
4436800
Jan-07
418400
4564100
0
2000000
4000000
6000000
8000000
10000000
12000000
Population
TOTAL POPULATION
INACTIVES
UNEMPLOYED POPULATION
WORKING POPULATION (15+ AGE)
Period

Inactive neither employed nor unemployed people in education, training, retired, illness, etc As per the graph, the number of Inactive are more than the number of working population. This is because of Austerity measures. Greek economy went off the rails in 2009 with a large fiscal deficit, an external current account deficit, drop in productivity and jump in public debt. Because of this, the country pushed away potential investors which substantially hurt the growth potential of the Greek economy leading to more migration of adults (Age: 15 65 years). The unemployment rate kept increasing till January 2013 after 2008-09 crisis.

CPI (CONSUMER PRICE INFLATION)

CPI Measures changes in the price level of market basket of consumer goods and services purchased by households.

The annual percentage change in a CPI is used as a measure of inflation.

The annual inflation of Greece has been recorded to be increased by 0.9%

The CPI has been reduced by -1.8% in July 2018 compared to June 2018. In the year 2017, it was recorded to be -1.7%.

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Weights of inflation 60.00 10.00 -40.00 Food inflation rate 3 Alcoholic beverages and tobacco Clothing
Weights of inflation
60.00
10.00
-40.00
Food inflation rate
3 Alcoholic beverages and tobacco
Clothing and footwear
Housing
Durable goods, household appliances and services
Health
Transport
Communication
Recreation and culture
Education
Hotels,cafés,restaurants
Miscellaneous goods and services
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-16
Jan-17
May-17
Sep-17
Jan-18
May-18

There has been an increase in the prices of

Transportation

Communication

food inflation

hotels, cafes and restaurants

There has been a decrease in the prices of

Clothing & Footwear

Durables

Alcoholic beverages.

8

6

4

2

0

-2

-4

-6

Monthly inflation growth with regard to core inflation core cpi growth cpi growth Jan-09 May-09
Monthly inflation growth with regard to core inflation
core cpi growth
cpi growth
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
May-16
Sep-16
Jan-17
May-17
Sep-17
Jan-18
May-18

Core Inflation reflects the relationship between the prices of the basic products and the buying power of the consumer. The core inflation refers to calculation of overall consumer price index excluding:

I.

Food and Nonalcoholic beverages

II.

Alcoholic beverages

III.

Tobacco and energy prices

If we observe in the year 2015, core CPI has been more than CPI, which continued till the year 2016. From the year 2017, CPI has been more than Core CPI and has continued till the year

2018.

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If the core inflation is lower, the Federal Bank of Greece wouldn’t consider doing anything, but if the core inflation is higher than inflation The Federal Bank will increase the rates and other contra-dictionary monetary policies. Core inflation is important to study because if your income doesn’t go up at the same rate, then you are losing buying power as prices rise.

same rate, then you are losing buying power as prices rise. 30 Monthly inflation growth with
30 Monthly inflation growth with regard to main inflation parameters 20 Food inflation rate Transport
30
Monthly inflation growth with regard to main
inflation parameters
20
Food inflation rate
Transport
Hotels,cafés,restaurants
Communication
10
0
-10
Monthly Inflation with regard to main Inflation Parameters
The main inflation parameters for CPI of Greece include:
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18

Transport

Food Inflation

Hotels, Cafes and Restaurants

Communication

Of all the parameters, Transport has a higher range of changes in its graph. In the year 2018, it has been on the positive side, but has increased up to 4.9%. Transport has been the highest contributor amongst the parameters for inflation. The second factor is food inflation, which is seeing a steady increase. Cost of Food has increased up to 1.5% in the month of July in 2018.

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MONETARY AND FINANCE

1)

KEY CONTRIBUTORS FOR LOAN GROWTH

Key Contributors for Loan Growth

3,50,000

3,00,000 2,50,000 2,00,000 1,50,000 1,00,000 50,000 0 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
3,00,000
2,50,000
2,00,000
1,50,000
1,00,000
50,000
0
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Growth (Million Euro)Loan

Time Period (2008 - 2018)

General GovernmentNon-financial corporations Insurance corporations Other financial intermediaries Individuals and private non-profit

Non-financial corporationsGeneral Government Insurance corporations Other financial intermediaries Individuals and private non-profit institutions

Insurance corporationsGeneral Government Non-financial corporations Other financial intermediaries Individuals and private non-profit

Other financial intermediariesGeneral Government Non-financial corporations Insurance corporations Individuals and private non-profit institutions

Individuals and private non-profit institutionsGeneral Government Non-financial corporations Insurance corporations Other financial intermediaries

In 2009, IMF helped Greece to bail out. Around265 Billion/ million dollars it helped. During these years, there is an increase in loan growth. The key contributors for Loan Growth are Individual & private non profit institutions and General Government (as it has taken heavy loan from IMF).

2)

POLICY RATE WITH LOAN GROWTH

Policy Rate with Loan Growth

20.00 3.5 15.00 3 10.00 2.5 5.00 2 0.00 1.5 -5.00 1 -10.00 0.5 -15.00
20.00
3.5
15.00
3
10.00
2.5
5.00
2
0.00
1.5
-5.00
1
-10.00
0.5
-15.00
-20.00
0
Loan Growth (%)
Jan-09
Jun-09
Nov-09
Apr-10
Sep-10
Feb-11
Jul-11
Dec-11
May-12
Oct-12
Mar-13
Aug-13
Jan-14
Jun-14
Nov-14
Apr-15
Sep-15
Feb-16
Jul-16
Dec-16
May-17
Oct-17
Mar-18
Policy Rate (%)

Time Period (2009 - 2018)

Sep-15 Feb-16 Jul-16 Dec-16 May-17 Oct-17 Mar-18 Policy Rate (%) Time Period (2009 - 2018) Loan

Loan Growth

Policy RatesApr-15 Sep-15 Feb-16 Jul-16 Dec-16 May-17 Oct-17 Mar-18 Policy Rate (%) Time Period (2009 - 2018)

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Since crisis to 2012, there was a drastic fall in loan growth because of decrease in Inflation during these periods. When the inflation decreases, there will be a decrease in policy rates as well. Policy rates and loan growth are indirectly proportional, i.e. the loan growth reduces with the increase of policy rates or vice versa. Currently Greece exited from the bail out after 10 years of its crisis, finally free from Austerity measures.

PUBLIC FINANCE Revenue vs. Expenditure

Revenue vs Expenditure

30000 25000 20000 15000 10000 5000 0 2016-Q1* 2016-Q2* 2016-Q3* 2016-Q4* 2017-Q1* 2017-Q2* 2017-Q3* 2017-Q4*
30000
25000
20000
15000
10000
5000
0
2016-Q1*
2016-Q2*
2016-Q3*
2016-Q4*
2017-Q1*
2017-Q2*
2017-Q3*
2017-Q4*
2018-Q1*
Expenditure
Revenue

The revenue vs expenditure chart suggests that for the second, third and fourth quarters for the year 2016, the revenue and expenditures have been increasing. This is due to impact of support to financial institutions was greater than the impact of corresponding expenditures. This is due to the fees accruing on interbank lending guarantees, bond loan schemes, and revenues from preference shares. For the remaining quarters expenditures were higher than the revenues.

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100%

80%

60%

40%

20%

0%

-20%

As Percentage of Revenues

2016-Q1* 2016-Q2* 2016-Q3* 2016-Q4* 2017-Q1* 2017-Q2* 2017-Q3* 2017-Q4* 2018-Q1*
2016-Q1*
2016-Q2*
2016-Q3*
2016-Q4*
2017-Q1*
2017-Q2*
2017-Q3*
2017-Q4*
2018-Q1*

Market Output2016-Q4* 2017-Q1* 2017-Q2* 2017-Q3* 2017-Q4* 2018-Q1* Property Income Other Current Transfers Other Subsidies

Property Income2017-Q2* 2017-Q3* 2017-Q4* 2018-Q1* Market Output Other Current Transfers Other Subsidies Current Taxes on

Other Current Transfers2017-Q3* 2017-Q4* 2018-Q1* Market Output Property Income Other Subsidies Current Taxes on Income Capital Transfers

Other SubsidiesMarket Output Property Income Other Current Transfers Current Taxes on Income Capital Transfers Taxes on

Current Taxes on IncomeProperty Income Other Current Transfers Other Subsidies Capital Transfers Taxes on Production and Imports Net Social

Capital TransfersOther Current Transfers Other Subsidies Current Taxes on Income Taxes on Production and Imports Net Social

Taxes on Production and ImportsProperty Income Other Current Transfers Other Subsidies Current Taxes on Income Capital Transfers Net Social Contributions

Net Social ContributionsIncome Other Current Transfers Other Subsidies Current Taxes on Income Capital Transfers Taxes on Production and

Under revenues, the primary contributors are taxes on import (26%- 39%), taxes on income (14% to 26%) and net social contributions (22% to 36%). Net social contributions consist of payments made to the general government for the benefit of their employees, accident, injury, sickness benefits, family allowances, pensions, unemployment insurance, etc.

As Percentage of Expenditure

As Percentage of Expenditure 100% 80% 60% 40% 20% 0% -20% Gross Capital Formation Capital Transfers

100%

80%

60%

40%

20%

0%

As Percentage of Expenditure 100% 80% 60% 40% 20% 0% -20% Gross Capital Formation Capital Transfers

-20%

Gross Capital FormationAs Percentage of Expenditure 100% 80% 60% 40% 20% 0% -20% Capital Transfers Adjustment for the

Capital Transfers100% 80% 60% 40% 20% 0% -20% Gross Capital Formation Adjustment for the Change in Pension

Adjustment for the Change in Pension40% 20% 0% -20% Gross Capital Formation Capital Transfers Other Current Transfers Social Benefits Current Taxes

Other Current TransfersCapital Transfers Adjustment for the Change in Pension Social Benefits Current Taxes on Income Property Income

Social BenefitsAdjustment for the Change in Pension Other Current Transfers Current Taxes on Income Property Income Subsidies

Current Taxes on IncomeChange in Pension Other Current Transfers Social Benefits Property Income Subsidies Payable Other Taxes on Production

Property IncomeCurrent Transfers Social Benefits Current Taxes on Income Subsidies Payable Other Taxes on Production Compensation of

Subsidies PayableSocial Benefits Current Taxes on Income Property Income Other Taxes on Production Compensation of Employees

Other Taxes on ProductionBenefits Current Taxes on Income Property Income Subsidies Payable Compensation of Employees Intermediate Consumption

Compensation of EmployeesBenefits Current Taxes on Income Property Income Subsidies Payable Other Taxes on Production Intermediate Consumption

Intermediate ConsumptionBenefits Current Taxes on Income Property Income Subsidies Payable Other Taxes on Production Compensation of Employees

The government expenditure is primarily towards compensation of employees 16% to 27% and social benefits 28% to 47%.

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Central Government Debt (As a Percentage of GDP)

Central Government Debt as Percentage of GDP 70000 100 90 60000 80 50000 70 60
Central Government Debt as Percentage of GDP
70000
100
90
60000
80
50000
70
60
40000
50
30000
40
20000
30
20
10000
10
0
0
GDP
Debt as Percentage of GDP
Q1-2010
Q2-2010
Q3-2010
Q4-2010
Q1-2011
Q2-2011
Q3-2011
Q4-2011
Q1-2012
Q2-2012
Q3-2012
Q4-2012
Q1-2013
Q2-2013
Q3-2013
Q4-2013
Q1-2014
Q2-2014
Q3-2014
Q4-2014
Q1-2015
Q2-2015
Q3-2015
Q4-2015
Q1-2016
Q2-2016
Q3-2016
Q4-2016
Q1-2017
Q2-2017
Q3-2017
Q4-2017
Q1-2018

The Central Government Debt has shown a fairly increasing trend from Quarter 1 2014 to Quarter 1 2018. The increase has been from 30,859 Million Euros to 41,968 Million Euros. The primary contributing factor is accounts payable which accounts for around 34% to 79% from Quarter 1 2010 to Quarter 1 2018. Short Term Loans are also a major contributing factor from Quarter 1 2014 to Quarter 1 2018. Short Term Loans have shown an increasing trend from 2.42% to 32.38%. The short-term loans were granted by the EU to allow to meet a huge payment to European Central Bank (4.2 Billion Euros) and International Monetary Fund and ever since they have increased their borrowing of short term loans in order to clear their previous debts.

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External Debt (As a Percentage of GDP)

External Debt as a Percentage of GDP

70000

460

440

420

400

380

360

340

60000 50000 40000 30000 20000 10000 0 GDP Gross External Debt The Greek external deficit
60000
50000
40000
30000
20000
10000
0
GDP
Gross External Debt
The Greek external deficit has reached in 2008 the historically high 14.8% of GDP and was
sustained through recession at 11.1% of GDP in 2009 and 10.5% in 2010. Financing these
deficits has led to gross external debt’s large increase which in Q3 2010 was above 190% of
GDP. The external debt as a percentage of GDP is 800% in the year 2018 Quarter 1.
2010
2010
Q1
Q2
2010
2010
Q3
Q4
2011
Q1
2011
2011
Q2
Q3
2011
Q4
2012
Q1
2012
Q2
2012
Q3
2012
Q4
2013
2013
Q1
Q2
2013
Q3
2013
2014
Q4
Q1
2014
Q2
2014
2014
Q3
Q4
2015
Q1
2015
2015
Q2
Q3
2015
2016
Q4
Q1
2016
2016
Q2
Q3
2016
Q4
2017
Q1
2017
Q2
2017
Q3
2017
2018
Q4
Q1

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Index of Industrial Production

Index of industrial production is the index which deals out with the various parameters such as Manufacturing, Mining, Electricity and water supply etc., there are core industries involved which contribute for the IIP index namely Consumer goods (durable and non-durables), Intermediate goods and capital goods. Usage of Base year: Base year is used as a benchmark in the measure of the business activity or economic index. Impacts of IIP:

A low IIP implies a lower production in the industrial sector which can be detrimental to the growth of the economy and vice versa.

Comparison of over all IIP values 2010-2017

96.00 94.995 95.00 94.307 94.00 92.441 93.00 92.00 90.900 91.00 89.510 90.00 88.685 89.00 87.768
96.00
94.995
95.00
94.307
94.00
92.441
93.00
92.00
90.900
91.00
89.510
90.00
88.685
89.00
87.768
88.00
87.00
INDEX OF INDUSTRIAL
PRODUCTION

2010

2011

2012

2013

2014

2015

2016

2017

2018

 

YEARS

The above graph showing the overall comparison of the IIP values of Greece taking the weighted average of all the major contributors’ sector wise IIPs. There is a steep decline in the IIP of Greece from 2010 till 2014 this is because of the reasons that Greece despite of having good earning capabilities because of their unwanted spending and heavy tax lavations from the corporates people are not willing to start and produce more from Greece as home and as soon as Greece has experienced economic bail out and because of the rigors austerity reforms adapted by the economy the production by industries started increasing back from 2014 which can be seen clearly. For the above years of IIP calculation the base year being 2010 which has a value of 100 and in contrast to that the IIP index have been dropped down to 87 points by 2014 and raised to 94 points by 2017 and is now showing the growing trend till July 2018 tracking.

Key contributors of IIP:

Coming to the key contributors of IIP as per the previous reports and the trends the following are the major contributors for IIP 1.Mining and quarrying

2.Manufacturing

3.Electricity

4.Water Supply And when it comes to the industrial goods

1.Energy

2.Intermediate goods 3.Capital goods

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4.Consumer durables and non-durables played a major role. 2-digit contributors include:

1.Basic pharmaceutical products 2.Extraction of crude petroleum and natural gas 3.Basic metals 4.Coke and refined petroleum products 5.Computer electronics and optical products

6.Beverages

7.Machinery and equipment Key Contributors of IIP 2017 In the context of Greece in the recent years there in no sector of IIP which is found predominant, we can say almost all the areas have covered equal chunk of share to the IIP and GDP contributions.

The above pie chart tells about the Greece major 4 IIP contributors for the year 2017, by observation Manufacturing and Water supply are the major contributors of IIP for Greece. IIP key contributors

IIP Contributors in June 2017 & 2018

200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00
200.00
180.00
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
0.00
Jun-18 Jun-17
Jun-18
Jun-17
in June 2017 & 2018 200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00

The above graph represents the monthly comparison of the level 2 contributors of IIP in Greece, by observation there is a considerable rise in the year of 2018 because of the entry into the IMF treaty and liberalized trade policies.

Key Contributors for IIP - 2017

27% 20% 27% 26%
27%
20%
27%
26%
Key Contributors for IIP - 2017 27% 20% 27% 26% Mining and Quarring Manufacturing Electricity Water

Mining and Quarring

Key Contributors for IIP - 2017 27% 20% 27% 26% Mining and Quarring Manufacturing Electricity Water

Manufacturing

Key Contributors for IIP - 2017 27% 20% 27% 26% Mining and Quarring Manufacturing Electricity Water

Electricity

Key Contributors for IIP - 2017 27% 20% 27% 26% Mining and Quarring Manufacturing Electricity Water

Water Supply

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This is the schematic illustration showing the annual growth rate from all the core sectors of IIP as mentioned above from Jan 2011 to May 2018.By observation we can say that there is a steep increase in the growth rate of electricity during 2017 Jan March which is due to the withheld of the power generation major from the hands of government undertaking to private and also the installed capacity of power generation is 18.5% less than the required to cater needs of the population.

IIP VS MANUFACTURING When a comparison is drawn between the total manufacturing in Greece and its influence on the IIP index and economy the graph shows something like this which is like either a rise or fall of the manufacturing IIP shows the incremental rise or fall in the total IIP.

IIP vs Manufacturing

250.00

200.00 150.00 100.00 Manufacturing
200.00
150.00
100.00
Manufacturing
IIP vs Manufacturing 250.00 200.00 150.00 100.00 Manufacturing IIP Manufacturing 50.00 0.00

IIP

IIP vs Manufacturing 250.00 200.00 150.00 100.00 Manufacturing IIP Manufacturing 50.00 0.00

Manufacturing

50.00

0.00

total IIP. IIP vs Manufacturing 250.00 200.00 150.00 100.00 Manufacturing IIP Manufacturing 50.00 0.00

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Balance of Trade

8,000.0

balance of trade

6,000.0 4,000.0 2,000.0 0.0 -2,000.0 -4,000.0
6,000.0
4,000.0
2,000.0
0.0
-2,000.0
-4,000.0

-6,000.0

8,000.0 balance of trade 6,000.0 4,000.0 2,000.0 0.0 -2,000.0 -4,000.0 -6,000.0 Imports Exports Trade Balance

Imports

8,000.0 balance of trade 6,000.0 4,000.0 2,000.0 0.0 -2,000.0 -4,000.0 -6,000.0 Imports Exports Trade Balance

Exports

8,000.0 balance of trade 6,000.0 4,000.0 2,000.0 0.0 -2,000.0 -4,000.0 -6,000.0 Imports Exports Trade Balance

Trade Balance

Balance of trade is trade deficit from the year 2004-2018 we can interpret that their imports are more than their exports and majority of their trading happens between the European countries like Germany and Italy because Greece will also come under the European Union. From the above chart we can also infer that their exports are not affected by any economic instability in the country. And they were trying to reduce their trade deficit over their period.

Top five exporter commodities

Greece exports increased from year on year to EUR 2.94 billion as of July 2018 and an average of EUR1.751 billion from 2004-2018 their major exports contribute to minerals (mineral oils, mineral fuels and products of their distillation) and i.e. around 64% continued by aluminium

(11%),

Top 5 exports in 2017 8% 8% 9% 11% 64%
Top 5 exports in 2017
8% 8%
9%
11%
64%

MineralsTop 5 exports in 2017 8% 8% 9% 11% 64% Machinery Plastic products Aluminium and articles

MachineryTop 5 exports in 2017 8% 8% 9% 11% 64% Minerals Plastic products Aluminium and articles

Plastic productsTop 5 exports in 2017 8% 8% 9% 11% 64% Minerals Machinery Aluminium and articles thereof

Aluminium and articles thereofTop 5 exports in 2017 8% 8% 9% 11% 64% Minerals Machinery Plastic products Pharmaceutical products

Pharmaceutical productsTop 5 exports in 2017 8% 8% 9% 11% 64% Minerals Machinery Plastic products Aluminium and

Top five Imports of 2017

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Top 5 Imports in 2017 10% 12% 51% 13% 14%
Top 5 Imports in 2017
10%
12%
51%
13%
14%

MineralsTop 5 Imports in 2017 10% 12% 51% 13% 14% Ships, boats and floating structures Electronics

Ships, boats and floating structuresTop 5 Imports in 2017 10% 12% 51% 13% 14% Minerals Electronics Machinery Pharmaceutical products

Electronics5 Imports in 2017 10% 12% 51% 13% 14% Minerals Ships, boats and floating structures Machinery

MachineryImports in 2017 10% 12% 51% 13% 14% Minerals Ships, boats and floating structures Electronics Pharmaceutical

Pharmaceutical productsTop 5 Imports in 2017 10% 12% 51% 13% 14% Minerals Ships, boats and floating structures

Minerals itself constitute of around 51% and the remaining materials they share almost equal proportions around 14% machinery (these machineries are those which are generally used for refining of minerals),13% by ships, boats and floating structures, 12% Pharmaceuticals and 10% contribute to electronics.

Top five exporter country

Italy Top 5 Export partners 13% 30% 17% 20% 20% Germany Turkey Cyprus Bulgaria

Italy

Top 5 Export partners 13% 30% 17% 20% 20% Germany Turkey Cyprus
Top 5 Export partners
13%
30%
17%
20%
20%
Germany
Turkey
Cyprus

Bulgaria

For Greece as it is a European nation majority of trade will generally happen between European nations and if we see the pie chart Germany is the highest with 30%, Italy by 20% and they together contribute around 50% and followed by Turkey and Cyprus. They are the largest producers of perlite in 2010 and they produce 1% of world bauxite

Top five importer partners

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Germany Italy Top 5 Import Partners 17% 27% 17% 20% 19% Russian Federation Korea, Republic

Germany

Germany Italy Top 5 Import Partners 17% 27% 17% 20% 19% Russian Federation Korea, Republic of

Italy

Top 5 Import Partners 17% 27% 17% 20% 19% Russian Federation Korea, Republic of
Top 5 Import Partners
17%
27%
17%
20%
19%
Russian Federation
Korea, Republic of

Iraq

In importing also majority is contributed by the European nations Germany by 27% and Italy by 20%, European nation together contribute by 47%, Russian federation by 19%, Korea republic by 17% and Iraq by 17%.

Exchange rate

Chart Title 1.6 9 8 1.4 7 1.2 6 1 5 0.8 4 0.6 3
Chart Title
1.6
9
8
1.4
7
1.2
6
1
5
0.8
4
0.6
3
0.4
2
0.2
1
0
0
EUR/USD
EUR/TRY
Oct-08
Mar-09
Aug-09
Jan-10
Jun-10
Nov-10
Apr-11
Sep-11
Feb-12
Jul-12
Dec-12
May-13
Oct-13
Mar-14
Aug-14
Jan-15
Jun-15
Nov-15
Apr-16
Sep-16
Feb-17
Jul-17
Dec-17
May-18

Exchange rate will tell you about how strong the currency is with respective to the USD For Greece the currency is EUR and the EUR is followed by 19 other nations also Greece country itself cannot influence the EUR but if any European nation is not doing good the currency might fall and this will impact the other nations also so avoid this European Union will come at this situation and they will support the nation by giving some financial aid and making some austerity reforms in the nation. In the above graph the blue line indicates the EUR/USD exchange rate and the orange line indicates EUR/TRY the steep up in EUR/TRY is because TRY(Turkey) as the economy went down.

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External Indicators

FOREIGN DIRECT INVESTMENT AND FOREIGN PORTFOLIO INVESTMENT

35000 1,20,000 30141 28130 99,904 1,00,000 30000 27140 23884 80,000 25000 22486 22119 60,000 18951
35000
1,20,000
30141
28130
99,904
1,00,000
30000
27140
23884
80,000
25000
22486
22119
60,000
18951
18743
20000
17750
40,000
15000
20,855
19,778
20,000
9,623
10000
6,583
6,978
8,348
0
5000
-16,428
-20,000
-22,664
0
-40,000
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Time Period (2008 -2016)
DIRECT INVESTMENT (Million Euros)
PORTFOLIO INVESTMENT (Million Euros)
Direct Investment (Million Euros)Foreign
Foreign Portfolio Investment (Million Euros)

The FDI (foreign direct Investment )is an investment made by a firm or individual in one country into business Interests located in another Country if we observe our chart there is fall in FDI from Jan 2010 as the economy went down during that time and the FDI started raising from the year 2014 as there is 4billion investment from the international market and the austerity reforms showed a development in the economy in the Greece. When Greece was offered its first bailout by the Euro Union in January - 2012 the entire world expected better production and increased activity in the country. Moreover, when a country receives bailout it utilises the said amount to cover the CAD deficit. When the CAD is served the amount of money in the economy rises which may lead to interest rate correction. So naturally expecting higher interest return foreign investors started flooding the market. Later when they realised that Greece government used much of the bailout amount to pay off the earlier interest obligations many of them started to retrace back their investments. This complemented with higher unemployment and high tax-rates lead to lower per capita income and hence decreased demand. When the production in a country falls FDI generally flows out of the economy.

Monetary and financial Policy

Policy rates

6

POLICY RATES

5 4 3 2 1 0 Lending Rates Jan-08 Jun-08 Nov-08 Apr-09 Sep-09 Feb-10 Jul-10
5
4
3
2
1
0
Lending Rates
Jan-08
Jun-08
Nov-08
Apr-09
Sep-09
Feb-10
Jul-10
Dec-10
May-11
Oct-11
Mar-12
Aug-12
Jan-13
Jun-13
Nov-13
Apr-14
Sep-14
Feb-15
Jul-15
Dec-15
May-16
Oct-16
Mar-17
Aug-17
Jan-18
Jun-18

Time Period (2008 - 2018)

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The policy rate is the key lending rate of the central bank in a country. The central banks use this policy rate as their main tool to control the inflation in the market. lending rates came down in Greece from 2008 year from 5% to around 2% from the year 2008 to 2009 and from the year 2009 it continues to be dovish market and by the year 2018 the lending rate has got flattened to almost zero percent lending rate.