Greece, as has often been the case since 2010, remains front-of-mind for investors as the stalemate with creditors reaches a critical junction this week.
Much has been written about the nation, its finances and ability to create turmoil despite its miniscule contribution to both the global economy and the euro area. However, it’s rare that we get an indication on the impact the debt crisis has had on the actual Greek economy.
In what is a simple-yet-powerful chart, the NAB provides the answer.
In real terms, the Greek economy is only 74.8% of its size at the start of 2006.
It’s a staggering contraction, and one that helps explain why the nation’s unemployment rate remains elevated above 26%, despite a sizeable reduction in overall size of the labour force. In comparison, while still high, euro area unemployment has inched down to 11.1% after hitting 12.1% back in mid-2013.
Should Greece not secure the necessary funding to avoid defaulting on its debt at the end of this month the outlook for nation’s economy, labour market and people will likely become significantly worse as a consequence.
According to the NAB “a reported meeting of Eurozone finance ministers this Thursday (18 June) is being cited as the next opportunity for an agreement to be reached according to Greek sources”.