Prosperity, but for the few – Why GDP growth hasn’t ‘touched’ the workers

The prosperity gap, based on the interim report of the GSEE INE, between Greece and the EU remains exceptionally high. In 2019, Greece’s real GDP per capita amounted to €17,210, compared to €32,270 in the EU, and in 2024, the difference remains at around €14,600.

According to the report, the economic development in Greece is accompanied by significant deficits in investment and the inclusion of all segments of society. Specifically, despite wage increases in recent years, when adjusted for the actual cost of living (purchasing power units), Greek workers receive significantly lower wages not only compared to Europeans but even compared to workers in Balkan countries.

“Greece, due to institutional and developmental obstacles, lags significantly behind even Central and Eastern European and Balkan countries in a number of key labor market indicators and the living conditions of workers,” states the GSEE INE, adding that in 2024, the average annual salary in Greece, in terms of purchasing power, dropped to 21,486 units, or 59.1% of the EU average (36,382). In 2019, this was 61.2% (18,204 in Greece, compared to 29,738 in the EU), and in 2009, it was 91.8% (22,107 in Greece, compared to 24,087 in the EU).

The conditions of underpayment for salaried workers in Greece, compared to other EU economies, are horizontal, covering nearly all sectors of economic activity.

Additionally, another important factor is the relationship between salaries and working hours. Specifically, in 2024, the average hourly wage of Greek workers in terms of PPS (Purchasing Power Standard) was 11.3, while in Central and Eastern European countries it was 15.3, in Balkan countries it was 18.1, and in regional economies, it was 20.4.

As the report states, in recent quarters, Greece has recorded higher economic growth rates than the EU average, reflecting primarily the stagnation of large economies (Germany, France, Italy). However, Greece’s performance still lags behind comparable countries. Several countries are recording significantly higher growth rates, revealing the relative lag of the Greek economy.

In detail, according to what is highlighted by the GSEE in the interim report it published on the Greek economy, the following is recorded:

In 2019, Greece’s real GDP per capita was €17,210, compared to €32,270 in the EU, and in 2024, the difference remains at approximately €14,600. Despite the recovery that occurred after 2021, the gap from the European average has not been reduced, indicating that the growth rates are insufficient for substantial convergence of living standards.

Greece’s GDP per capita in purchasing power units (PPS) increased from 65.5% of the EU average in 2019 to 68.5% in 2024. At the same time, compared to Eastern European countries, Greece lags behind countries like the Czech Republic (90.6%), Lithuania (87.5%), Estonia (79.0%), and Poland (78.4%), while it is mainly comparable to Latvia (68.4%). Romania (77%) is clearly ahead of Greece, which only surpasses Bulgaria (65.9%). It is worth noting that from 2019 to 2024, Greece improved its position by only 3 percentage points, compared to Bulgaria’s 11 percentage points, indicating weaker convergence dynamics.

The structure of demand remains consumption-driven. Household consumption accounts for 67.7% of GDP in Q3 2025, compared to 51.1% in the EU. Investments have increased to 16.9% of GDP, but they remain significantly lower than the EU average (21.3%). Meanwhile, the trade deficit is widening from 0.8% of GDP in 2019 to 3.9% in 2025, highlighting the economy’s chronic import dependency.

The structure of the investment recovery in recent years does not enhance productivity or the productive transformation of the economy. The share of investments in housing as a percentage of total investments increased from 7.1% in 2019 to 19.0% in 2025, while investments in machinery and equipment decreased from 26.8% to 21.3%, and in technology, information, and communication from 9.3% to 8.0%. These changes, which reflect the allocation of investment resources, do not create conditions for substantial improvements in the qualitative aspects of the development model, skill upgrading, and the creation of quality jobs.

More than eight years after the country exited the economic adjustment programs, and despite the economy returning to positive growth rates, labor market performance, although improved in recent years, still remains far from the European average. Even more concerning, however, is the fact that Greece, due to institutional and developmental obstacles, still significantly lags behind even Central and Eastern European and Balkan countries in several key labor market indicators and the living conditions of workers.

For example, in Q3 2025, Greece’s employment rate was 65.6%, which is 5.7 percentage points lower than the EU average, and 8.5 and 0.8 percentage points lower than the employment rates in Central and Eastern European and Balkan countries, respectively. During the same period, the labor market underperformance rate in Greece, although reduced to 11.6%, remained considerably higher than the average rate in Central and Eastern European countries (6.2%) and the Balkans (8%).

Additionally, in 2024, the share of employed individuals in the industrial sectors in Greece was 12.2%, slightly increased compared to 2019, but 0.9 percentage points lower than in 2009. Compared to the performance in other EU countries under examination, this figure raises significant concerns. Specifically, in Central and Eastern European countries, the average rate was 23.2%, in the Balkan economies 21.6%, and in regional economies (Spain, Portugal, Italy) 17.3%. Similar discrepancies are found regarding the share of those working in high-tech and medium-high tech manufacturing sectors, as well as in broader high-tech industries.

However, significant discrepancies also exist concerning the wages of workers. Specifically, while in 2009, the average annual salary in Greece in terms of PPS (22,107) represented 91.8% of the EU average (24,087), in 2019 this ratio decreased to 61.2% (18,204 in Greece, compared to 29,738 in the EU), and in 2024, it is even lower at 59.1% (21,486 in Greece, compared to 36,382 in the EU).

The situation remains equally problematic when considering the total wages of employees relative to their working hours. Specifically, the average hourly wage of workers in Greece in PPS in 2024 was 11.3, while in Central and Eastern European countries it was 15.3, in the Balkan countries 18.1, and in regional economies 20.4.

It is noted that the underpayment conditions for salaried workers in Greece, compared to other examined EU economies, are widespread, covering almost all sectors of economic activity. For example, in 2024, in industrial sectors (excluding construction), the average hourly wage in PPS in Greece was 14.1, while in Central and Eastern European countries it was 15.1, in the Balkan countries 15.2, and in regional economies 21.4.

Also, in the same year, in services, the hourly wages of salaried workers in Greece in PPS accounted for only 72% of the corresponding average level in Central and Eastern European countries, 56.5% in Balkan countries, and 54.4% in regional economies. It is also worth noting that significant wage discrepancies between Greece and other EU member states are observed even in sectors where Greece has a relatively high concentration of employment, such as in the “Wholesale and retail trade, repair of motor vehicles and motorcycles” sector and the “Accommodation and food service activities” sector.

The poor performance recorded by Greece compared to other EU member states regarding the development of key quantitative and income indicators in the labor market is also reflected in corresponding disparities in a series of indicators that reflect the living standards of citizens and workers.

Although it is true that our country now shows improved performance in several living condition indicators, the distance between Greece and other EU member states in some of these indicators remains wide, and in some cases, this gap has increased, despite the end of the economic crisis of the 2010s.

For example, in 2024, the percentage of employees living in conditions of material and social deprivation in Greece was 21%, and it was by far the highest among the 15 selected EU member states, surpassing the European average by 12.6 percentage points. In comparison with Central and Eastern European countries, the percentage in Greece was higher by 16.1 percentage points, and in comparison with the regional economies by 11.8 percentage points. A smaller (7.6 percentage points) discrepancy was found in the percentage of employees in Greece living in material and social deprivation in relation to other Balkan states.

Moreover, in Greece in 2024, 18.5% of individuals living in households with dependent children reported that they were unable to keep their home sufficiently warm, compared to an average of 12.9% in regional economies and 10.4% in Balkan countries, which have recorded a remarkable reduction in these percentages over the past fifteen years.

In addition, in 2024, the percentage of the population living in households with dependent children and unable to meet various fixed payments, such as rent or loan installments, water and electricity bills, credit card payments, etc., was a high 46.6%. In comparison with the corresponding average percentage in Balkan countries, this percentage was higher by 30 percentage points, and compared to the level in regional economies and Central and Eastern European countries, it was higher by 34.6 and 40.3 percentage points, respectively.

The data shows that Greece is establishing a path of structural divergence, where increases in production and GDP are not translating into corresponding improvements in the wages and living conditions of workers. This development highlights a structural problem of social and developmental convergence.

The systematic monitoring, evaluation, and correction of these disparities is, in our view, a major challenge of the applied economic and social policy. This is because, in a period when new hierarchies of power and competition are being formed on a global scale due to rapid changes in the techno-economic model of economies, serious geo-economic shifts, and broader structural transformations (demographics, digitalization, climate crisis, etc.), these disparities further undermine the fragile resilience of the Greek economy, acting as potential catalysts for macroeconomic and financial instability and the deterioration of social welfare.

A potential source of macro-financial instability remains the housing problem, which has been at the center of public interest in recent years due to, among other factors, the increase in housing expenses. It is noteworthy that in 2024, in Greece, the housing expenditure as a percentage of disposable income stood at 35.5%. This figure, although reduced compared to 2019, remains by far the highest among EU member states. It is striking that single-person households in Greece spent 51.1% of their disposable income on housing needs, while four-person households consisting of two adults with two dependent children spent 34.8% of their disposable income on housing. These performances represent the worst performance among EU member states.

It is emphasized that in 2024, the percentage of the population in Greece living in households where housing costs exceeded 40% of their disposable income (excessive housing cost burden) was 28.9%. Despite this being lower than in 2019 (36.2%), it remains the highest among EU member states. Significant differences in the percentage of excessive housing cost burden are observed depending on the ownership status of the residence. In 2024, this percentage for renters was 37.4% (the third highest in the EU), while for individuals in owned homes, without an outstanding loan or mortgage, it was 25.7% (the highest among EU member states).

Furthermore, housing costs in Greece have a disproportionate impact on the welfare of citizens from different income brackets. Specifically, in 2024, for individuals in the lowest income quintile, the percentage of excessive housing cost burden was 88.6% (compared to 27.8% in the EU), while for wealthier individuals (5th income quintile), it was 1.4% (compared to 0.7% in the EU).

At the regional level, the highest percentage of excessive housing cost burden in 2024 was found in the regions of Central Macedonia (35.7%), Peloponnese (33.1%), Eastern Macedonia and Thrace (31.9%), North Aegean (31.7%), and Western Greece (31.5%). In contrast, the lowest percentages were recorded in the regions of Crete (20.4%) and South Aegean (23.5%), followed by Epirus (24.6%), Attica (26.5%), and Ionian Islands (26.9%). Finally, the corresponding percentages in Thessaly (28%) and the regions of Central Greece (28.6%) and Western Macedonia (29.3%) were close to the national average. It is worth noting that eight out of thirteen regions in the country recorded higher percentages of excessive housing cost burden in 2024 compared to 2021.