ECONOMY

Agencies see major slump in Greek GDP

Gloomy forecasts by foreign observers

Agencies see major slump in Greek GDP

Rating agencies and investment banks are downgrading their estimates regarding the course of the Greek economy in 2021, with their representatives telling Kathimerini that the extended, stricter lockdown, the generally slow rollout of vaccinations across Europe and the new strains of the coronavirus are hindering the prospects of a recovery and will result in Greece suffering a deep recession over the first quarter of the year.

ING chief economist Carsten Brzeski told Kathimerini that the first three months of 2021 will be one more lost quarter for Greece’s economy. He said that the company’s latest estimates after the new general lockdown put the Q1 contraction at 13% on an annual basis, adding that the rebound will be rather weak for the rest of the year. Given the delays in the vaccination process in many countries there is also the risk that the summer tourism season will be weaker than expected.

“All this means that overall growth in 2021 will range around 2% and Greece will have to wait even longer, up to the second half of 2023, before it returns to its pre-crisis levels,” estimated Brzeski.

Jakob Suwalski, lead analyst on Greece at Scope Ratings, says his agency is also downwardly revising its estimates about Greek growth this year. He explained to Kathimerini that the firm’s updated projection by the baseline scenario is for growth to come to 3.5% in 2021 against a previous forecast for 4.5%.

That review, Suwalski said, reflects the economic losses associated with travel restrictions across Europe, the market that is vital for the rebound of the Greek tourism sector.

Therefore the year’s first half is going to be difficult, added Suwalski, and for the 3.5% result to be achieved Greece will need to rely on a strong rebound from the third quarter, which is always the most important period for the country’s gross domestic product due to travel receipts.

UniCredit is also anticipating a double-digit recession over the first quarter. Tullia Bucco, the bank’s head analyst in Greece, tells Kathimerini UniCredit expects an 11.3% contraction in January-March on an annual basis and a 1.3% drop on a quarterly basis, following the new lockdown measures, although it is still too early to assess the full impact of the restrictions and their duration.