With the U.S. economy on the mend and the euro area (perhaps) out of crisis mode, it seems as if the worst of the Great Recession has passed. At least in terms of real output. However, while most of the OECD bottomed out during 2008-2010, Greece took much longer to reach its nadir and fell much further. The graph above shows that Greece had lost over 25% of its 2007 GDP by the time it plateaued in 2014—a staggering drop in living standards, especially compared with a decline of 4-5% at most in the U.S. and euro area overall. By 2011, the U.S. had returned to pre-contraction output and Europe was steady, whereas Greece had just entered one of the sharpest periods of its downturn.
The graph below demonstrates how Greece’s relative decline is even starker in historical terms. The lowest point of the recession in the U.S. and euro area occurred in 2009 and pushed those economies back to 2005 levels of output—about four years of lost growth. But the lowest point for Greece was in 2014 and pushed back its economy to 1999 levels of output—about a decade and a half of lost growth.
How these graphs were created: Search for “Gross Domestic Product by Expenditure in Constant Prices: Total Gross Domestic Product for Greece,” and select the “Index 2010=1.00, Seasonally Adjusted” version. Use the “Add Data Series” option to add similarly titled OECD series for the euro area and U.S. Set the units for each series to “Index (Scale value to 100 for chosen period),” and use “2007-12-01” for the first graph and “1995-01-01” for the second graph under “Observation Date.”
Suggested by Ian Tarr.