Friday, March 23, 2018
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Economic Facts

Gross Domestic Product

The Region of Crete participates in the Gross Domestic Product of the country at a percentage of 5%. In particular, for the year 2008, according to recent data of the Regional Accounts of the Hellenic Statistical Authority, the GDP of Crete amounted to 12.854 million euro and formed 5,4% of the national GDP (Chart 1). The Regional Unit of Heraklion, being the most populated one, has the largest participation (52,06%) in the regional GDP, followed by the Regional Unit of Chania (23,07%). The participation of the Regional Units of Lasithi and Rethymno is at lower levels (12,89% and 11,98% respectively).


Chart 1: Gross Domestic Product of Crete (Source: EL.STAT. 2012)

The GDP of Crete showed a considerable increase (75,35%) during the years 2000-2008, in line with the 73,85% increase in the national GDP for the same period. The Regional Unit with the highest GDP percentage increase was the Regional Unit of Heraklion, followed by the Regional Unit of Chania (77,14%) and the Regional Unit of Lasithi (76,93%). The Regional Unit of Rethymno showed a considerably lower GDP increase of 52,23%.

Per capita Gross Domestic Product

The per capita Gross Domestic Product of Crete is equal to that of the country. In the year 2008 it amounted to 21.157 euro, matching the corresponding figure of the total of the Regions of the country (21.084 euro).

The per capita GDP of Crete showed a constant upward course during the years 2000-2008, with a total percentage increase of 70,98%. The Regional Units of Heraklion and Lasithi show higher rates, followed by the Regional Units of Chania and Rethymno. The highest percentage increases for the aforementioned period were in the Regional Unit of Lasithi (77,51%), the Regional Unit of Heraklion (74,45%) and the Regional Unit of Chania (73,49%), while the lowest increase was in the Regional Unit of Rethymno 47,91%.


Chart 2: Per capita Gross Domestic Product of Crete (Source: EL.STAT. 2012)

The development of the GDP in Crete and the partially different growth rates in the four Regional Units are pictured in Chart 2. According to data of the Statistical Service of the EU (Eurostat) for the year 2010, the per capita GDP of Greece amounts to 21.700 euro. The corresponding figure for the EU (average of the 27 countries) is 24.500 euro, while the average of the Euro-zone countries is 26.400 euro.


Gross Added Value

The Gross Added Value in the total of the productive branches in Crete amounts to 11.375 million euro (data of the year 2008). As seen in Chart 3, the produced added value of products and services during the period 2000-2008 in Crete shows a considerable increase of 75,67%.

Among the different productive branches the branch "Industry and Energy" shows the highest increase, as part of the secondary sector, with a 165% percentage but with a relatively low total added value (851 million euro). The branch "Trade and Tourism" has the most important contribution to the added value of the products of Crete, as part of the tertiary sector, with 4.589 million euro, while it also presents a high increase of 85% during the period 2000-2008.


Chart 3: Gross Value Added by sector in Crete (Source: EL.STAT. 2012)

The primary sector, in absolute figures, remains stagnant with a downward trend, having, however, remarkably reduced its contribution percentage in the regional added value from 10,04% in 2000 to 5,51% in 2008 (Chart 4). In contrast, the branch "Industry and Energy" has an upward trend, with its contribution percentage rising from 4,96% in 2000 to 7,48% in 2008. The percentages of the rest of the branches remain stable with deviations of up to 2 percentage points.

The branch "Trade and Tourism" still has the highest participation percentage in the added value, being the pivot of the development of Crete. The services delivered in the branch in 2008 contributed 40,34% to the total regional added value.


Chart 4: Sectors percentage contribution to GrossValue Added in Crete (Source: EL.STAT. 2012)

Cumulatively, for the three main sectors of the economy of Crete it was found out that in the year 2008 the Primary sector had a 5,51% participation, the Secondary sector (Industry and Constructions) participated with 13,84%, with the Tertiary sector had the largest participation (80,65%). The Regional Unit of Lasithi appears to differentiate itself, as it maintained a two-digit percentage and continued to lay stress on the Primary sector (10,10%), in contrast to the three other units, whose percentages fluctuate between 4,32% and 5,65%, while having exceeded 80% in the Tertiary sector.

The following Charts show the percentage participation of Crete in the Gross Added Value of the country by sector and demonstrate its distribution in the four Regional Units.

In the Primary sector Crete contributes 9, 53% to the added value of the branch at national level (Chart 5). This figure, however, can further be considerably improved, focusing on matters of standardization, display and promotion of the quality agricultural products of Crete.

The decrease of the added value in agriculture can be explained to a certain degree by the abandonment of some traditional cultivations, such as the vineyard cultivation, in combination with the constantly falling prices of olive oil and some vegetables. The areas with a large decline in agriculture are those having a large development in tourism. Massive tourism increases revenues but also creates imbalances. While the more developed areas mainly along the northern coast continue to develop, inland rural areas are declining and their economic situation is deteriorating.


Chart 5: Gross Value Added in «Agriculture» sector (Source: EL.STAT. 2012)

The Primary sector has a domineering position in terms of products and employment, but it is characterized by small and dispersed lot, dependence on traditional models and cultivations, structural backwardness with imperfect infrastructures, largely outdated production systems and low postproduction added value. Moreover, the percentage of watered areas in Crete is much lower than that of the average of Greece, while the structure of the cultivations shows an emphasis on traditional cultivations. The cultivations of vegetables cover 3% of the total cultivation areas, but Crete has 50% of the greenhouses in Greece, with "Industry and Energy" advantages in the productions of vegetables and flowers. Animal breeding is also dispersed, with few organized animal farms. However, there are important preconditions for the development of dairy products.

In the branch "Industry and Energy" the low participation percentage of Crete (3,11%) in the national total is particularly obvious (Chart 6). The Regional Unit of Heraklion, being the most developed in the Secondary sector, concentrates 57,30% of the added value produced.

In the Secondary sector there are structural problems concerning the usually small size and the family form of the businesses. The small size and the family form of most of the businesses often prevent their progress and largely explain their organizational and economic weaknesses and the subsequent low innovation.


Chart 6: Gross Value Added in «Industry including Energy» sector (Source: EL.STAT. 2012)

Processing mainly involves the processing of the products of the primary sector (foods and drinks), the constructions sector and the sector of plastics. Processing businesses are of relatively small size, with the exemption of cooperative businesses.

Crete only has 1,8% of the heavy industry and few units create a high turnover. The processing of the primary sector products shows problems of organization, quality, planning and standardization as well as difficulty in modernizing the production procedure. There are also difficulties in organizing commercial networks for the promotion of local products.

The relations between processing and services, networking and interconnection with research centres are at low level. The degree and speed of moving into modern accommodations is not satisfactory and creates environmental problems and pressures along with the expansion of settlement and the development of other sectors in the local economy. The trends in the sector of exports are hopeful, showing an increase of 13,5% in Crete for the period 07/2010-06/2011.

The sector of Energy and in particular the Renewable Energy Sources can be an important source of economic activity and employment growth in the island and can also reduce dependence on fossil fuels. The potential of the sector remains strong and there are great possibilities in the field of hybrid systems. The widest possible use of renewable energy sources technologies contributes to the safety of energy supplying and the development of new economic sectors, creating new jobs.

The sector of "Green" energy can also be a pivot of development, promoting economic growth through large "clean" investments, social cohesion through the creation of new decentralised work positions and complementary incomes, the protection of the environment and the development of local expertise and technology.

In the Constructions branch Crete participates with a satisfactory percentage (6,82%). The value produced in the 4 Regional Units is distributed with balance (Chart 7).

Even if the branch is generally undergoing a period of deep depression, it had benefitted in the previous period mainly from the development of the tourism branch.


Chart 7: Gross Value Added in «Construction» sector (Source: EL.STAT. 2012)

In the strongest branch of the Cretan economy, "Trade and Tourist Services", the Regional Units of Heraklion and Chania appear to be stronger than the rest of the regional units, having some of the important tourist sites of the island and the two largest cities (Chart 8).

Tourism is the most dynamically developing sector and the demand gave incentives for important investments in hotel units, resulting in the qualitative and quantitative upgrading of hotel infrastructures. At the same time it is facing structural problems, consisting mainly in its seasonal nature and the limited expansion of the tourist movement to the inland settlements, as tourist infrastructures are mainly gathered in the northern coast and small centers in the south, while its course is largely influenced by outward, uncontrollable conditions, contributing to fluctuations in its performance.


Chart 8: Gross Value Added in «Trade and Tourism» sector (Source: EL.STAT. 2012)

An important competitive advantage of the tourist branch is the high percentage of high standard hotel infrastructures. As seen in Table 1, Crete has 30,31% of the total of 5 star beds in Greece and 24,57% of 4 star beds respectively.


Table 1: Hotel capacity (percentage to Greece) by category in Crete, 2011 (Source: SETE 2012)

Overnight stays amounted to 16.449.065 in 2010, comprising 24,6 of the total overnight stays in Greece.

The two most important airports of Crete, State Airport "N. Kazantzakis" in Heraklion and State Airport "I. Daskalogiannis" in Chania, welcome a large number of flights, particularly during the tourist season. In the year 2011 the Airport of Heraklion hosted 2.173.138 international tourist passengers’ arrivals, while the airport of Chania hosted 656.985 arrivals respectively.

As pictured in Chart 9, during the four months of the high tourist season (June – September) the Airport of Heraklion is the first airport in international tourist arrivals in Greece. The existing infrastructures and the limited capacity impede the normal function of the Airport. It is notable that international arrivals in August 2011 amounted to 469.611 or correspondingly to 15.136 per day, domestic flights included. At the same time the viable function of a new modern airport necessitates the extension of the tourist season.


Chart 9: International tourist arrivals in the main airports of Crete and in Athens (Source: CAA 2012)

In the Tertiary sector including among else the "financial and credit services" the percentage contribution of Crete is relatively low (4,50%). In the Regional Unit of Heraklion about 50% of the regional added value is produced (Chart 8).

In the tertiary sector, the administrative, educational and financial services, as well as transports, are mostly concentrated in the large urban centres.


Chart 10: Gross Value Added in «Financial Services» sector (Source: EL.STAT. 2012)

Because of the insular nature of the economy and its exporting orientation, very powerful transportation and shipping companies have been founded. Since 1980 a University, a Technical University and Technological Institutes, as well as important Research Centers (Foundation of Research & Technology, Hellenic Centre for Marine Research etc.) were founded in Crete.

The participation indices of Crete to research activities are considerable higher than those of the rest of the Regions of Greece.

The added value from other services delivered fluctuates at 24,51% of the total regional figure (Chart 4), while the participation to the national value of the branch is 5,27% (Chart 11).


Chart 11: Gross Value Added in «Other Services» sector (Source: EL.STAT. 2012)



Employment in the Region of Crete has remained at the same levels during the past decade. The number of working people increased from 267.320 in 2000 to 274.872 in 2008, that is, it presented a small increase of 2,82%. Significant increases and decreases in employment appear, however, in the different branches of the regional economy (Chart 12). In the primary sector the work force appears reduced from 76.659 in 2000 to 48.734 in 2008, which corresponds to a decrease of 36,43%.


Chart 12: Employment by sector in Crete (Source: EL.STAT. 2012)

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