Tourism softened blow of crisis

Tourism softened blow of crisis

The tax competitiveness of the Greek tourism product needs to be restored, while the short-term rentals market should be regulated and an efficient national strategic plan for the sector is required “ahead of the observed slump in demand from our traditional markets,” according to a report published by the Institute of the Greek Tourism Confederation (INSETE).

“Having achieved remarkable growth during the crisis, tourism greatly contributed toward the recovery of the Greek economy and its return to growth. This course has been complemented by a major increase in employment,” said the report titled “The Greek Economy: Growth and Economic Policy after Exiting the Bailouts.”

INSETE calculates that incoming tourism in the decade of the crisis, from 2009 to last year, contributed about 125 billion euros to the Greek economy, while the vast majority of the 230 million visitors to the country during that period enjoyed positive experiences at a time when Greece became a target for the international media.

Takings from incoming tourism grew by about 50 percent from 2012 to 2018, while employment in the sector increased by 12.7 percent from 2009 to 2018, unlike in the rest of the economy, where employment recorded a decline of 18.2 percent over the same period.

In its report, INSETE cites “the need to adopt a new economic policy package, to apply from 2019 to 2021, that will include a rationalized sum of measures to reduce overtaxation and increase growth and social expenditure.”

Such a package, INSETE argues, could, under certain conditions, take the country’s growth rate to over 3 percent and the revenues of the general government to record a rise of more than 2.3 percent despite the reduction of overtaxation. This development would safely lead to a general government primary surplus above 3.6 percent of gross domestic product in 2020, INSETE points out, even with a significant increase in fixed capital investments by general government entities and a rise in social spending that would see the government’s primary expenditure grow 2.2 percent next year.

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