The government is banking on this summer’s tourism for Greece to escape the risk of recession other countries in Europe are facing, and therefore save citizens’ incomes without having to delve deeper into the public coffers for new support measures.
The focus of attention is the distance of over 7 billion euros between last year’s tourism takings of €11 billion and the record level of €18.2 billion in 2019; if Greece manages to cover that distance this year the economy will have a satisfactory year despite everything, with the growth rate at 3% according to the country’s midterm fiscal plan.
So far indications in that direction have been very positive: Even if arrivals are below those of 2019, inflation and quality upgrades may well take revenues up to par with those of three years ago, economists estimate.
That would see the national economy outperform the eurozone average, as analysts only see Greece and Italy preserving their growth rate thanks to tourism. They do warn, however, that a new shock in the fall – that cannot be ruled out – would render economic conditions very difficult as Greece is already seen on the limit. There is such uncertainty that nobody can make any safe forecasts, as projections keep being revised.
Many banks and investment firms now speak of a possible recession toward end-2022 or in 2023, while the European Commission has added two adverse scenarios to its forecasts for the European economy. If that were to materialize, Greece would also face the impact, if at some delay: Tourism will not resist for ever and if, for example, Germany goes into recession, German tourists will not visit Greece, leading to a new cycle of decline.
Besides tourism, the government is pinning its hopes on the Recovery and Resilience Fund resources, which may well sustain the economy this year.
Finance Minister Christos Staikouras and his alternate, Thodoros Skylakakis, keep repeating that for now the fiscal space has been exhausted, but do leave a window of hope open in case some leeway is created that could be utilized for supplying additional support to the economy.