A modern Greek tragedy - the crisis years in context

19/6/2015

By Keith Fray and Valentina Romei

During the six years from 2007 to 2013 the annual output of the Greek economy fell by more than 26 per cent. On the FT’s statistics desk we wanted to know how that fall ranked compared with sustained periods of economic retrenchment and dislocation in other countries.

We crunched data from the US Conference Board, which has real gross domestic product, adjusted for purchasing power, for most countries in the world, going back to 1950 (with estimates for this year).

We identified the biggest consecutive falls in annual GDP from peak to trough. Ranking periods ranging from one to 10 years, we found that the Greek economy had the largest contraction of any advanced economy since 1950.

This is also the largest fall not caused by war, radical political change or, for some Middle East countries, a sustained drop in the oil price. Many of the most severe episodes occurred in the 15 former Soviet Socialist Republics after the break-up of the USSR. Similar experiences were seen in the former component countries of Yugoslavia, and other eastern European countries after the end of communism.

The only contractions worse than that in Greece so far this century have been in Zimbabwe, after hyperinflation, and in Syria, during a civil war

In comparison, crisis periods in other developed countries seem mild. The next largest fall post-1945 for an advanced economy was in Finland, where GDP dropped 9.7 per cent between 1990 and 1993, followed by Ireland, where output contracted 8.8 per cent between 2007 and 2009.

This Greek drama has also been protracted in time – no other advanced country has had a longer period of consecutive annual contraction since 1950.

The Greek economy grew by 0.8 per cent last year, and is expected to grow again this year, but recovery from the crisis years may take generations.

Greek economic fall is so big that larger falls have been experienced only as the result of wars or major economic-political "revolutions".

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