The Greek economy will post a rebound of 4.2% this year, as 2021 “marks the beginning of the end for the Covid-19 pandemic,” according to the annual report by Bank of Greece Governor Yannis Stournaras published on Tuesday.
This estimate matches the previous one a few months ago by the country’s central bank. It is significantly better than the baseline scenario of both the Greek government and the European Commission for a 3.5% recovery after the 8.2% contraction in 2020.
Stournaras highlighted the strength the country’s economy has shown despite its dependence on tourism, one of the sectors most affected by the pandemic.
“Despite the heavy losses, the Greek economy has shown remarkable resilience and ability for operational adjustment to the new situation,” the report read, according to an e-mailed press release.
The central banker identified a series of factors set to turn the economy around in the course of 2021, including the vaccination program, the rebound of demand and tourism, and the significant resources from the Next Generation EU fund of grants and loans.
In the report, Stournaras cautioned about the length and efficiency of the restrictions regarding the pandemic.
“The fact that the measures have been in place for a prolonged time, combined with uncertainty regarding the dynamics of the pandemic and the pace of vaccinations worldwide, fuels economic uncertainty and delays recovery,” he wrote.
The speed at which the Greek economy will recover will depend on three crucial factors, the report noted: the acceleration of vaccination in Greece and internationally, the proper targeting of fiscal expansionary measures to benefit those worst affected, and the speed of activation of the government plan for the utilization of the EU resources.
The central bank also projects a general government primary budget deficit of 5.3% of the gross domestic product (GDP) in 2021.