PRESS RELEASE | 12.02.2026
The Greek economy without stereotypes: productive model and tourism
A new study by INSETE highlights the gradual shift of the Greek economy – which continues to be characterised by serious weaknesses and dysfunctions – over the last 10 years towards a more extroverted productive model, with exports, competitiveness and manufacturing being strengthened alongside tourism, challenging with evidence the narrative of monoculture and the “café economy”.
Key findings of the study
- Over the last decade, Greece has been gradually shifting towards a new production model: since 2015, exports of goods have been growing faster (average annual rate: +7.8%) than tourism receipts (+4.8%) and GDP (+3.4%).
- Manufacturing is strengthening: manufacturing output is growing at a rate of around +3% (2013-2024), higher than the GDP growth rate (+2.7%), while employment in the sector is also increasing, at an average annual rate of +2.3% – double that of total employment (+1.1%) – and investment in mechanical, transport and technological equipment (+8.8%).
- Agri-food sector: from a deficit of €3 billion in 2008, it will record a surplus of €460 million in 2023 (according to KEPE).
- International competitiveness: improvement (devaluation) of the real effective exchange rate of the euro for Greece, based on labour costs per unit of output: -32.9% compared to the fourth quarter of 2009.
- Productivity: in normal times, it increases at a satisfactory rate annually (2017-2019: +1.23%) (2021–2025: +1.9%).
- Employment: The accommodation and catering sectors created approximately 19% of new jobs after 2013: a significant percentage, but far from the “almost half” that is often cited.
- Tourism: a comparative advantage, not a structural weakness. Upgrading it can support overall productivity and sustainable growth.
Public debate in recent years has often been trapped in the stereotype of the “café economy” or “café Greece”: an economy that is supposedly based solely on tourism, catering and low-productivity activities, unable to produce internationally competitive goods, increase its productivity in a sustainable manner and reduce its external deficits.
The new INSETE study “The Greek economy without stereotypes: productive model and tourism” re-examines this image through macroeconomic analysis and highlights a more complex reality: the country is gradually shifting towards a new production model, while tourism acts as a comparative advantage that can strengthen, rather than replace, manufacturing and internationally competitive agriculture.
Why the narrative of the “economy of coffee” became dominant
Criticism of the “outdated production model” is often linked to two observations:
- the high and persistent trade deficit, and
- the increase in employment in the accommodation and catering sectors after 2013.
These two observations lead to the conclusion that the Greek economy has not changed since the crisis, that it remains unproductive and that its growth is fragile due to tourism.
The study argues that this interpretation does not accurately reflect the macroeconomic picture and, above all, leads to conclusions that divert the discussion from the essential: how to capitalise on the real positive changes and how to address the serious weaknesses and dysfunctions that still exist.
Trade balance and tourism: what the macroeconomic picture shows
The study points out that the trade deficit should not automatically be seen as a sign of “productive failure”. It is linked, in accounting terms, to the evolution of other balances of the external balance of payments, mainly the services balance and the capital account. When these surpluses widen, the trade deficit increases mechanically, regardless of the performance of goods exports.
In the same context, the study shows that the explosive growth in imports in the recent period is related to net inflows and the widening of surpluses in the external services and capital balances, while exports of goods are also showing strong upward momentum.
At the same time, the trade deficit is a long-standing feature of the Greek economy, with one crucial difference: today, the external position is not based on extensive public borrowing to cover uncontrolled fiscal deficits, but on internationally tradable services and net capital inflows.
Greece should seek to harmonise with the EU-20 countries with the aim of achieving surpluses in the external balance of goods and services by substantially limiting the explosive growth of imports. To achieve this goal, and given the low level of savings in the private sector of the economy, public savings, i.e. primary surpluses in the general government, should be maintained at adequate levels and incentives for inflows of non-developmental capital from abroad should be avoided, especially when directed towards financing consumer and non-productive investment activities.
Towards a new productive model: exports and manufacturing develop in parallel
The most critical point of the study is that the narrative of the “coffee economy” tends to overlook performance in sectors that are supposedly absent from economic growth. If the core of the new productive model being sought is to increase exports of goods, strengthening industrial production and improving international competitiveness, then official data show that the Greek economy has been gradually moving in this direction for a decade.
In particular, between 2009 and 2024, exports of goods increased at an average annual rate of around +7%, a rate that exceeds both the equally significant increase in tourism receipts (+5%) and the corresponding performance of major European economies, while after 2015 the momentum strengthened further (+7.8%). At the same time, manufacturing output shows a steady increase from 2013 to 2024, at rates (+3%) higher than the GDP growth rate (+2.7%), while employment in manufacturing is growing at twice the rate (+2.3%) of total employment (+1.1%).
The improvement in the international competitiveness of the economy is determined both by the increase in exports of goods and services and by the significant depreciation of the Real Effective Exchange Rate of the euro for Greece, based on Labour Costs per Unit of Output (REERULC): -32.9% compared to the fourth quarter of 2009 and -13.2% compared to 2000.
Particular importance is also attached to the performance of the agri-food sector, where the change in the external balance – from a deficit of €3 billion in 2008 to a surplus of €460 million in 2023, according to the Centre for Economic Policy Research (KEPE) – reflects an improvement in international competitiveness in a critical sector.
Employment: what the actual figures say
The growth of tourism and related sectors has contributed significantly to reducing unemployment and increasing employment. However, the study points out that the perception that “Greece is just cafés” does not reflect the actual structure of employment. According to the ELSTAT Labour Force Survey, the accommodation and catering sectors created around 19% of new jobs after 2013: a significant percentage, but far from the “almost half” that is often cited.
Productivity: why comparisons with the crisis distort the picture
Another basis for criticism is the evolution of productivity indicators since 2008. The study argues that these comparisons are problematic due to (a) the extreme fiscal conditions of 2008-2009 that led to economic collapse, (b) the deep economic crisis of 2009-2016, and (c) the radical change in the methodology for measuring GDP after 2010 and the successive revisions that underestimate the real growth in economic activity, as consistently highlighted in the annual reports of the National Economic Research Institute (INSEETE) on the Greek economy.
In contrast, in more recent periods of normality, when data become more consistent and the economy functions more smoothly, productivity shows satisfactory growth rates, even in parallel with significant employment growth . Between 2017 and 2019, productivity increased at a CAGR of +1.23%, while between 2021 and 2025 it increased at a CAGR of +1.9%.
Tourism is not the problem: it is a comparative advantage
Based on the above findings, the study concludes that the growth of tourism did not come at the expense of manufacturing or internationally competitive agriculture. These sectors developed in parallel. At the international level, productivity growth tends to be higher when economies exploit their comparative advantages. Tourism is such an advantage for Greece, and its further upgrading is not a structural weakness but a strategic advantage.
Towards a more sober public debate
Mr. Elias Kikilias, General Director of INSETE, stated: “The Greek economy is still in the early stages of a major restructuring, but it is not without significant problems. There are serious weaknesses and dysfunctions in the functioning of markets, institutional effectiveness, resource allocation and investment composition that limit growth potential, potential productivity gains and, above all, improvements in the standard of living of citizens. However, addressing them requires accurate diagnosis – not stereotypes. The narrative of the ‘coffee economy’ and ‘café Greece’ does not help in policy-making. It underestimates the country’s actual performance, devalues dynamic export and productive sectors, and confuses macroeconomic figures with structural weaknesses. The challenge is not to “escape” from a non-existent “coffee economy,” but to capitalise on the real achievements of the last decade and to address the significant real problems with realism. Only in this way can public debate become sober and contribute effectively to the formulation of a socially sustainable development strategy.