International rating agencies may adjust their forecasts on Greece’s gross domestic product soon, but for now they are happy with the estimates they have already made about 2020 as a whole, following the announcement by the Hellenic Statistical Authority (ELSTAT) on Thursday of a 15.2% annual contraction of the economy in the second quarter of the year.
So far only Fitch has completed its two reviews of the Greek economy for 2020, though next week it will publish its adjusted forecasts on the global economy, followed by new forecasts for Greece. On October 23, Standard & Poor’s and DBRS will release their second forecasts for Greece, followed on November 6 by Moody’s.
Kathrin Muehlbronner, senior vice president at Moody’s Investors Service and chief analyst on Greece, tells Kathimerini that the country’s Q2 contraction came close to the agency’s estimates, given the measures imposed on the economy and the impact of the reduced activity in tourism and consumption.
Moody’s expects the economy to start rebounding from the third quarter, gaining strength in the fourth. It is therefore retaining its forecast for a 9.5% economic drop for 2020 as a whole and a 7% rebound in 2021.
S&P is also sticking to its projections for this year: Marko Mrsnik, chief analyst on Greece, tells Kathimerini that “the ELSTAT announcements were along the lines of our current forecast for a 9% GDP drop this year, after which a 5.5% rise is expected for 2021.”
Second-quarter data were slightly better, by two percentage points, than expected by Scope Ratings, its chief analyst on Greece, Jakob Suwalski, notes to Kathimerini, adding that he is now preparing a new report on the country.
The economy is benefiting particularly from the government measures to contain the crisis, while the emergency action by the European Central Bank and the European Commission have also boosted Greece. Indexes such as tourism arrivals and business sentiment have pointed to a recovery in the third quarter, a period that is vital for the annual growth of the Greek economy, as 55% of tourism takings concern the July-September period.
“Overall we are sticking to our forecast for a reduction to the real GDP by 7.8% in 2020 and a 5.2% recovery in 2021,” stresses Suwalski.