The country’s economy is seen rebounding by 5.0% to 5.5% this year under a baseline scenario after an 8.2% slump last year, an influential think tank said on Tuesday, raising its previous 3.5% to 4.0% growth forecast made in April.
“Greece’s economy can take advantage of the strong growth wave in the global economy but must keep a careful eye on undercurrents,” Foundation for Economic and Industrial Research (IOBE) head Nikos Vettas said.
The new forecast sees the economy growing at a faster clip than a central bank forecast made last month. The Bank of Greece expects a 4.2% rebound in GDP this year.
The EU Commission projects the economy will grow 3.5% this year, the government sees a 3.6% rebound and the International Monetary Fund expects a 3.3% expansion rate.
The economy’s contraction last year turned out to be less steep than expected, despite tough restrictions to contain the coronavirus pandemic. Both the European Commission and the Bank of Greece had forecast a 10% decline in GDP.
The think tank’s baseline scenario assumes no new surge of the pandemic in the second half of the year and a gradual but strong pick up in tourism.
It expects tourism revenues to reach 40%-45% of those in 2019 which was a record year, improving from last year when revenue only attained 24% of 2019 levels.
Under an adverse scenario, the think tank sees the economy rebounding more slowly, with growth likely to be half that of the baseline scenario’s 5.0%-5.5% projection, Vettas said.
The adverse scenario assumes a new surge of the pandemic in the second half due mainly to variants of the coronavirus and a slower rebound in tourism, with revenues likely to reach only 35% of 2019 levels.
“If we have restrictive measures in September we will not be able to have tourism,” Vettas said.