GDP Growth and Poverty in Greece: Explanations and Solutions

Despite GDP growth in Greece, the majority of citizens are experiencing a decline in living standards. Economist Ilias Kikilias from EKKE analyzes the paradoxes of the Greek economy and proposes solutions.

Why is GDP increasing but living standards deteriorating? According to Mr. Kikilias, GDP growth does not automatically translate into an improvement in the daily lives of households. Almost 90% of GDP comes from domestic consumption, while the sector that produces for the domestic market relies on low labor costs.

Why are we champions in working hours and laggards in productivity? Greece has high rates of self-employment and small family businesses, affecting the organization of labor. The institutional quality of the country lags behind other countries such as Portugal.

Why is the share of wages in GDP decreasing and the share of profits increasing? In 2024, the share of wages decreased to 35%, while profits increased to 50.2%. This indicates an unequal distribution of income.

Why did Greeks negatively rate the measures of the Thessaloniki International Fair (DETH)? The measures do not change the proportion of consumption taxes that burden low and middle incomes. The lack of prospects for young people and the subsidy policy do not create better jobs.

Change of production model: While exports are increasing, the trade deficit has doubled due to the increase in imports. Creating quality jobs remains a challenge.

Mr. Kikilias emphasizes the need for radical changes in the governance model and the fight against corruption for sustainable development.