The economic recession in 2020 was significantly milder in Greece than the government and most analysts had expected, as according to the first estimate by the Hellenic Statistical Authority (ELSTAT), issued on Friday, gross domestic product shrank 8.2% last year on an annual basis. This compares with the government’s estimate for a 10.5% contraction, included in the 2021 budget, and the latest European Commission forecast for a 10% drop.
That figure is still worse than the eurozone average of -6.8% and the European Union average of -6.4%. However, it is better than Italy’s -8.8% and Spain’s -11.2%.
The contained contraction in the last quarter of 2020 and the upward revision of Q2 and Q3 saved the day for Greece in 2020. Analysts also noted yesterday that the government’s support measures played a key role in damage control: “The fiscal intervention has been effective, especially in the employment domain,” commented National Bank’s chief economist Nikos Magginas.
In the fourth quarter of the year GDP declined 7.9% from October-December 2019, while on a quarterly basis it expanded 2.7% from Q3.
In Q3 the decline eventually came to 10.5% against a previous estimate of 11.7% and in Q2 to 13.8%, compared to a 14.25% estimate. The first quarter of last year actually showed an annual expansion of 0.1%, rather than the 0.4% contraction forecast.
“The figures show that healthy enterprises continued their investments and public investment supported investment activity,” explained Magginas.
Prime Minister Kyriakos Mitsotakis commented that “despite the great dependence on tourism, the GDP data show that the Greek economy demonstrated greater resilience than many people had thought in 2020.”
Finance Minister Christos Staikouras added that the Greek economy was strongly shaken but withstood the impact of the pandemic. He noted that, although the data are provisional, they “confirm the correctness of the economic policy exercised; a policy that includes a broad range of measures for supporting households and corporations, managing to soften the pandemic’s economic blow.”