Greece’s economy performed better than others in the eurozone in the first quarter but the hit from coronavirus restrictions in the second and third quarters will be “dramatic,” Prime Minister Kyriakos Mitsotakis said on Friday.
Speaking in parliament, Mitsotakis announced new measures worth 3.5 billion euros to support businesses hurt by a lockdown imposed to contain the spread of the pandemic.
“We are aware that the impact on growth in the second and third quarter will be dramatic,” Mitsotakis said, adding that his goal was to ease that impact as much as possible.
The state will extend some tax relief measures for businesses which lost more than 35% percent of their turnover in the first half of the year, Mitsotakis said.
It will also cover social security contributions until October and offer liquidity support for affected businesses.
Greece emerged from a decade-long debt crisis in 2018 and was hoping for strong growth in 2020. But the nationwide lockdown imposed in March to prevent coronavirus infections has turned those expectations upside down.
The Greek economy is expected to shrink by about 8-10% this year before recovering in 2021.
Mitsotakis said that averting a rapid increase in unemployment was his government’s top priority. The jobless rate stood at 16.2 in the first quarter.