It is generally expected that foreign trade plays a large role in a small open economy such as exists in Greece. A measure of the relative weight of trade is the ratio of the sum of exports and imports to the country's GDP. In Greece this ratio grew until 1985, when it reached almost 50 percent, but it declined from that point to about 40 percent in 1992. The decline has been evenly divided between exports and imports. The export decline verifies the weakening competitive position of Greek products in the world market, and especially in the market of the EC/EU. The import decline is simply the outcome of domestic demand being weakened by the austerity policies of the early 1990s. Nevertheless, the Greek economy remains highly internationalized and quite sensitive to developments in foreign trade, as compared with larger economies such as that of the United States, in which the sum of exports and imports is less than 20 percent of GDP.

The high degree of internationalization in the Greek economy is demonstrated by the fact that, besides exports and imports of goods, the nation's foreign economic relations include a large component of so-called invisibles, such as receipts from tourism, international merchant shipping, and emigrant remittances. Generally speaking, these receipts can be considered as revenues from sales of services to foreigners inside or outside the country. In recent years, invisibles have amounted to between 22 percent and 25 percent of GDP. Thus, the degree of internationalization of the Greek economy is even higher than is suggested by trade figures alone.

Data as of December 1994

NOTE: The information regarding Greece on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Greece The Role of Foreign Trade information contained here. All suggestions for corrections of any errors about Greece The Role of Foreign Trade should be addressed to the Library of Congress and the CIA.