Germany
The German economy - the fifth largest economy in the world
in PPP terms and Europe's largest - began to contract in the second
quarter of 2008 as the strong euro, high oil prices, tighter credit
markets, and slowing growth abroad took their toll on Germany's
export-dependent economy. At just 1% in 2008, GDP growth is expected
to be negative in 2009. Recent stimulus and lender relief efforts
will make demands on Germany's federal budget and undercut plans to
balance its budget by 2011. The reforms launched by the former
government of Chancellor Gerhard SCHOEDER, deemed necessary due to
chronically high unemployment and low average growth, led to strong
growth in 2007, while unemployment in 2008 fell below 8%, a new
post-reunification low. Germany's aging population, combined with
high chronic unemployment, has pushed social security outlays to a
level exceeding contributions, but higher government revenues from
the cyclical upturn in 2006-07 and a 3% rise in the value-added tax
cut Germany's budget deficit to within the EU's 3% debt limit in
2007. The current government of Chancellor Angela MERKEL has
initiated other reform measures, such as a gradual increase in the
mandatory retirement age from 65 to 67 and measures to increase
female participation in the labor market. The modernization and
integration of the eastern German economy - where unemployment still
exceeds 30% in some municipalities - continues to be a costly
long-term process, with annual transfers from west to east amounting
to roughly $80 billion. While corporate restructuring and growing
capital markets have set strong foundations to help Germany meet the
longer-term challenges of European economic integration and
globalization, Germany's export-oriented economy has proved a
disadvantage in the context of weak global demand.
Ghana
Well endowed with natural resources, Ghana has roughly twice
the per capita output of the poorest countries in West Africa. Even
so, Ghana remains heavily dependent on international financial and
technical assistance. Gold and cocoa production, and individual
remittances, are major sources of foreign exchange. The domestic
economy continues to revolve around agriculture, which accounts for
about 35% of GDP and employs about 55% of the work force, mainly
small landholders. Ghana signed a Millennium Challenge Corporation
(MCC) Compact in 2006, which aims to assist in transforming Ghana's
agricultural sector. Ghana opted for debt relief under the Heavily
Indebted Poor Country (HIPC) program in 2002, and is also benefiting
from the Multilateral Debt Relief Initiative that took effect in
2006. Thematic priorities under its current Growth and Poverty
Reduction Strategy, which also provides the framework for
development partner assistance, are: macroeconomic stability;
private sector competitiveness; human resource development; and good
governance and civic responsibility. Sound macro-economic management
along with high prices for gold and cocoa helped sustain GDP growth
in 2008.
Gibraltar
Self-sufficient Gibraltar benefits from an extensive
shipping trade, offshore banking, and its position as an
international conference center. The British military presence has
been sharply reduced and now contributes about 7% to the local
economy, compared with 60% in 1984. The financial sector, tourism
(almost 5 million visitors in 1998), shipping services fees, and
duties on consumer goods also generate revenue. The financial
sector, the shipping sector, and tourism each contribute 25%-30% of
GDP. Telecommunications accounts for another 10%. In recent years,
Gibraltar has seen major structural change from a public to a
private sector economy, but changes in government spending still
have a major impact on the level of employment.
Greece
Greece has a capitalist economy with the public sector
accounting for about 40% of GDP and with per capita GDP about
two-thirds that of the leading euro-zone economies. Tourism provides
15% of GDP. Immigrants make up nearly one-fifth of the work force,
mainly in agricultural and unskilled jobs. Greece is a major
beneficiary of EU aid, equal to about 3.3% of annual GDP. The Greek
economy grew by nearly 4.0% per year between 2003 and 2007, due
partly to infrastructural spending related to the 2004 Athens
Olympic Games, and in part to an increased availability of credit,
which has sustained record levels of consumer spending. But growth
dropped to 2.9% in 2008, as a result of the world financial crisis
and tightening credit conditions. Greece violated the EU's Growth
and Stability Pact budget deficit criteria of no more than 3% of GDP
from 2001 to 2006, but finally met that criteria in 2007-08. Public
debt, inflation, and unemployment are above the euro-zone average,
but are falling. The Greek Government continues to grapple with
cutting government spending, reducing the size of the public sector,
and reforming the labor and pension systems, in the face of often
vocal opposition from the country's powerful labor unions and the
general public. The economy remains an important domestic political
issue in Greece and, while the ruling New Democracy government has
had some success in improving economic growth and reducing the
budget deficit, Athens faces long-term challenges in its effort to
continue its economic reforms, especially social security reform and
privatization.
Greenland
The economy remains critically dependent on exports of
shrimp and fish and on a substantial subsidy - about $700 million in
2008-09 - from the Danish Government, which supplies about 60% of
government revenues. The public sector, including publicly-owned
enterprises and the municipalities, plays the dominant role in the
economy. Several interesting hydrocarbon and mineral exploration
activities are ongoing and in 2007 a US firm signed an agreement
with the Greenland Home Rule government to study the feasibility of
building a multi-billion dollar aluminum smelter and hydropower
plant. Denmark plans to reduce its subsidies to Greenland as
revenues from oil exports come onstream.
Grenada
Grenada relies on tourism as its main source of foreign
exchange especially since the construction of an international
airport in 1985. Hurricanes Ivan (2004) and Emily (2005) severely
damaged the agricultural sector - particularly nutmeg and cocoa
cultivation - which had been a key driver of economic growth.
Grenada has rebounded from the devastating effects of the hurricanes
but is now saddled with the debt burden from the rebuilding process.
Public debt-to-GDP is nearly 110%, leaving the THOMAS administration
limited room to engage in public investments and social spending.
Strong performances in construction and manufacturing, together with
the development of tourism and an offshore financial industry, have
also contributed to growth in national output; however, economic
growth will likely slow in 2009 because of the global economic
slowdown's effects on tourism and remittances.
Guam
The economy depends largely on US military spending and
tourism. Total US grants, wage payments, and procurement outlays
amounted to $1.3 billion in 2004. Over the past 30 years, the
tourist industry has grown to become the largest income source
following national defense. The Guam economy continues to experience
expansion in both its tourism and military sectors.
Guatemala
Guatemala is the most populous of the Central American
countries with a GDP per capita roughly one-half that of Argentina,
Brazil, and Chile. The agricultural sector accounts for about
one-tenth of GDP, two-fifths of exports, and half of the labor
force. Coffee, sugar, and bananas are the main products, with sugar
exports benefiting from increased global demand for ethanol. The
1996 signing of peace accords, which ended 36 years of civil war,
removed a major obstacle to foreign investment, and Guatemala since
then has pursued important reforms and macroeconomic stabilization.
The Central American Free Trade Agreement (CAFTA) entered into force
in July 2006 and has since spurred increased investment in the
export sector, but concerns over security, the lack of skilled
workers and poor infrastructure continued to hamper foreign
participation. The distribution of income remains highly unequal
with more than half of the population below the national poverty
line. Other ongoing challenges include increasing government
revenues, negotiating further assistance from international donors,
curtailing drug trafficking and rampant crime, and narrowing the
trade deficit. Given Guatemala's large expatriate community in the
United States, it is the top remittance recipient in Central
America, with inflows serving as a primary source of foreign income
equivalent to nearly two-thirds of exports. Economic growth will
slow in 2009 as export demand from US and other Central American
markets drop and foreign investment slows amid the global slowdown.
Guernsey
Financial services - banking, fund management, insurance -
account for about 23% of employment and about 55% of total income in
this tiny, prosperous Channel Island economy. Tourism,
manufacturing, and horticulture, mainly tomatoes and cut flowers,
have been declining. Financial services, construction, retail, and
the public sector have been growing. Light tax and death duties make
Guernsey a popular tax haven. The evolving economic integration of
the EU nations is changing the environment under which Guernsey
operates.
Guinea
Guinea possesses major mineral, hydropower, and agricultural
resources, yet remains an underdeveloped nation. The country has
almost half of the world's bauxite reserves. The mining sector
accounts for more than 70% of exports. Long-run improvements in
government fiscal arrangements, literacy, and the legal framework
are needed if the country is to move out of poverty. Investor
confidence has been sapped by rampant corruption, a lack of
electricity and other infrastructure, a lack of skilled workers, and
the political uncertainty because of the death of President Lansana
CONTE in December 2008. Guinea is trying to reengage with the IMF
and World Bank, which cut off most assistance in 2003, and is
working closely with technical advisors from the U.S. Treasury
Department, the World Bank and IMF, seeking to return to a fully
funded program. Growth rose slightly in 2006-08, primarily due to
increases in global demand and commodity prices on world markets,
but the standard of living fell. The Guinea franc depreciated
sharply as the prices for basic necessities like food and fuel rose
beyond the reach of most Guineans. Dissatisfaction with economic
conditions prompted nationwide strikes in February and June 2006.