Greece’s economy is seen rebounding 3.5% to 4% this year, provided there are no pandemic surges in the second half, after an 8.2% slump last year, the Foundation for Economic and Industrial Research (IOBE) said on Tuesday, trimming a previous 4-4.3% growth forecast.
“The economic prospects are positive but in no way can we say that the health crisis has been tamed irreversibly,” IOBE head Nikos Vettas said. “We expect a restart in tourism from mid-May. Our baseline scenario assumes there won’t be a flare-up of the pandemic in the second half,” he said.
The forecast sees the economy growing at a slower clip than a central bank forecast earlier this month. The Bank of Greece expects a 4.2% rebound in GDP this year. The economy’s contraction last year turned out to be less steep than expected despite tough restrictions to contain the coronavirus. Under an adverse scenario, the think tank sees the economy growing more slowly, by 1.5% to 2% this year.
“The return to a twin-deficit mode which characterized the recent 10-year debt crisis cannot but worry us,” Vettas said, adding that that tourism this year may have different qualitative characteristics, meaning the incoming revenue may not disperse as well through the economy. “We need to be cautious regarding tourism’s multipliers this year. Better to save what we can this year and prepare better for 2022,” he said. [Reuters]