Greece will face an inevitable recession, a rise in unemployment, a blow to tourism and the deterioration of its property market due to the shock from the Covid-19 pandemic, with the debt-to-gross domestic product ratio rising, according to Wood Financial Group, but it is expected to fare much better than most other countries and emerge from the crisis with low borrowing costs.
Having introduced movement restrictions early, Greece can gradually reopen in May and June, the group’s report argues. However, the macroecomomic recovery has frozen and Wood estimates the economic contraction will come to 4.3 percent this year before a 4.7 percent rebound in 2021.
Estimating this year’s GDP is particularly difficult, the report adds, due to uncertainties in tourism, consumer behavior after the restrictions are lifted, the negative impact on sectors such as manufacturing, and the effects of the Greek government’s expansive fiscal policy and lower oil rates.
Household consumption is seen shrinking 10 percent this year, but spending is projected to rebound in 2021 and fully cover this year’s losses. Unemployment is forecast to rise to 20 percent before easing to 17 percent in 2021.