Recession looms before breather in 2021

Recession looms before breather in 2021

Memories of Greece’s bailout years are returning as a result of the macroeconomic shocks caused by the Covid-19 pandemic, according to the International Monetary Fund, which however is also predicting a return to growth in 2021.

The Greek economy is expected to contract by 10 percent in 2020. It’s the highest rate in the eurozone, as tourism plays a key role in the Greek economy and is the most affected sector.

The recession will be followed by 5.1 percent growth in 2021, the IMF said in its World Economic Outlook report, which was presented by Gita Gopinath, its chief economist.

The Fund’s forecasts for the eurozone are not far from those of the Commission, which has placed the spectrum of the dip at between 5 and 10 percent.

For Greece, 10 percent compares to the worst year of the bailouts in 2011, when the economy shrank 9.1 percent, while the decline in GDP in 2009 and 2010 together came to 10 percent, as well as in 2012 and 2013 together.

Regarding unemployment, the IMF estimates that it will rise to 22.3 percent in Greece in 2020, while for 2021 it estimates that it will hover around 19 percent. The current account deficit will reach 6.5 percent of GDP by 2020, while in 2021 it will fall to 3.4 percent.

At the same time, the government is striving to mitigate the impact of the crisis as far as possible with the announcement in the coming days of new support measures.

More specifically, announcements regarding shipping, energy and private health are imminent over the next few days and will be mostly in the form of financial assistance.

Shipping, which has been hit particularly hard, will be accorded a special status and strengthened accordingly. Private clinics, which have seen their revenue plummet by 60 percent in April, will also be assisted. Companies dealing with energy will be given government guarantees for loans. Measures for tourism will follow.

Amid the gloom however, the Health Ministry’s chief adviser Sotiris Tsiodras said the disease is in decline as the rate of its transmission has decreased below one – meaning one infected person infects less than one healthy person.

However, there is growing concern about the possibility of the public easing its self-restraint over Easter. On Tuesday, 25 new cases were announced, with the total number of confirmed cases increasing to 2,170, while the death toll rose to 101 from 99. 

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