The European Commission revised its forecast for Greek economic growth on Wednesday, forecasting growth rates of 4.1 pct in 2021 and 6.0 pct in 2022. The EU executive, in a report on its spring economic forecast, said the coronavirus pandemic and all the restrictive measures led the Greek economy into a deep recession in 2020 (-8.2%), with tourism and the services sector particularly hard hit. However, the timely implementation of support measures managed to moderate the extent of the economic contraction, “Supporting the employment and liquidity of enterprises. A supportive fiscal policy, combined with a strong boost expected from the recovery and sustainability plan, is expected to contribute to the resumption of the economy,” the commission said in the report.
Support measures managed to avoid large-scale layoffs, keeping unemployment at 16.3 per cent of the workforce, while employment fell due to lower employment in the tourism sector. The report noted that advances in a vaccination machine in Greece will allow for a gradual easing of restrictive measures, contributing to higher private consumption, especially in 2022, while in the second half of 2021 an increase in investment is expected due to start of projects in the framework of the national recovery plan. Greek GDP is expected to grow by 4.1 percent this year and by 6.0 percent in 2022.
The unemployment rate is projected to remain at 16.3 percent of the workforce this year and ease slightly to 16.1 percent in 2022, while the inflation rate is expected to remain slightly negative this year and recover in 2022.
The country’s fiscal deficit is projected to grow to 10% of GDP this year, from 9.7% in 2020, but the nominal deficit is projected to fall to 3.2% of GDP in 2022. The country’s public debt is expected to grow to 209% of GDP this year and to ease 202 percent of GDP in 2022.
European Economy Commissioner Paolo Gentiloni, at a press conference in Brussels on Wednesday, said the growth prospects of the Greek economy are good, despite the effects of the pandemic on important sectors, such as tourism.
Specifically, Gentiloni stated that the Greek economy is expected to grow at a rate of 4.1 pct in 2021 and 6 pt in 2022, noting that this is important for a country that is particularly affected by the effects of international difficulties in the field of tourism. .
He said he hopes this impact on the tourism sector will be significantly reduced in the coming period, with a much better tourism season, but will not be completely eliminated.
“In this regard, the forecasts of the Commission for the Greek economy are good, although slightly lower than those of the Greek authorities, due to the great weight we gave to the effects of restrictions on the pandemic in the first quarter of 2021,” he said. added.
Finally, the European Commissioner stressed that the general escape clause of the Stability and Growth Pact also applies to the objectives of the Greek program and added that a significant period of activity is beginning for Greece and the recovery of its economy.