The ‘Magic Image’ of Unemployment Rate Reduction in Greece

The number of the country’s workforce remains lower compared to the pre-crisis period, despite a significant reduction in unemployment, according to ELSTAT. The unemployment rate is calculated as the ratio of unemployed people to the total labor force, which includes both employed and unemployed individuals. According to data released by ELSTAT on March 4, 2025, the unemployment rate dropped to 8.7% in January 2025, the lowest since December 2008, just before the Greek economic crisis and the Memoranda. However, Greece’s return to pre-Memorandum unemployment rates does not signify a return to pre-crisis employment levels. Specifically, the labor force (employed and unemployed) stood at 4.897 million people in December 2008. In contrast, in January 2025, it was 4.696 million people, a decrease of 201,000 (-4.1%) from December 2008. Similarly, the number of employed people in January 2025 (4.288 million) was also lower than in December 2008 (4.463 million), showing a drop of 175,000 (-3.9%). The reason for the slightly lower unemployment rate in January 2025 compared to December 2008 is that the percentage decrease in the number of unemployed was greater than the percentage decrease in the labor force (5% vs. 4.1%). While the reduction in unemployment is significant, both in absolute and relative terms, it cannot be ignored that the overall labor force continues to lag behind pre-crisis levels, depriving the Greek economy of further growth potential.