Greece The Composition of National Income
Sources: The Library of Congress Country Studies; CIA World Factbook
In 1992 the share of the GDP generated in the so-called primary sector, including agriculture, animal husbandry, and fishing, was about 12 percent. At the same time, the secondary sector--mining, manufacturing, energy, and construction--yielded 26 percent of GDP and the share of the tertiary sector, including trade, finance, transport, health, and education, was 59 percent. The high share of services is characteristic of the entire postwar period. The relative shares of the three sectors were respectively about 18 percent, 31 percent, and 50 percent in 1970.
The service sector long has been considered a residual sector of activity, featuring activities with high underemployment and masked unemployment that absorb resources released by other sectors. Many experts consider this traditional view wrong in the mid-1990s because modern services are having a palpable impact on the Greek economy and on everyday life. In any case, the quantitative as well as the relative weight of the service sector has been growing in recent years. After the service share of GDP remained static in the 1970s, the 1980s showed a distinct trend towards increased participation by services. This trend is consistent with the weakening of industry, which normally releases resources into the service sector. However, it is also consistent with a rise in the standard of living, which normally increases the demand for services. Both factors likely contributed to the rising share of services after 1980. Living standards improved over that period, but domestic manufacturing also suffered a serious loss of its market share to international competition.
Another important recent trend relates to the allocation of national income to investment within the country. The formation of fixed capital as a proportion of GDP has declined steadily in Greece from an all-time high of 27 percent to about 20 percent in recent years. This trend is connected with the slowdown in growth rates and in manufacturing activity; it is also probably related to the redistribution of resources to services, because most demand for fixed investment arises either in the primary or secondary sectors of an economy.
Despite the investment slowdown, the ratio of private savings to GDP has not exhibited any significant change, remaining at about 20 percent. On the other hand, total national saving (including private and public saving), has dropped because Greek public saving has been negative in recent years (see The Public Sector and Taxation , this ch.). High private saving is desirable for the economy because it enables the financing of public sector deficits as well as domestic investment.
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 Composition of National Income information contained here. All suggestions for corrections of any errors about Greece The Composition of National Income should be addressed to the Library of Congress and the CIA.