The Greek economy is projected to grow by 3.3% this year and 5.4% in 2022, the International Monetary Fund said in its staff report released on Friday.
The IMF said that simulations of the macroeconomic impact of Greek government fiscal support measures indicate that government measures would help contain the impact of the Covid-19 pandemic on the non-financial companies (NFCs) sector, compared to a counterfactual scenario of no policy support in which the impact on NFCs’ financial distress would be similar to that during the Greek sovereign crisis.
In this respect, improvements in NFCs’ financial performance over the past decade resulted in a large reduction of “trapped debt” held by companies in persistent financial distress (zombie firms). This suggests that the impact of the crisis on NFCs is adequately addressed by temporary support measures.
The IMF noted that, despite the pandemic, the Greek government implemented reforms in several sectors, although at a slower pace compared with the recent past. It said the government’s reaction to the pandemic was swift and efficient and helped the economy to show resilience.