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Greece Forecasts 10.5% Recession this Year, 4.8% Growth in 2021


The Greek economy is expected to contract by 10.5 percent this year and to grow by 4.8 percent in 2021, according to provisions included in the new state budget, which was brought before Parliament by Finance Minister Christos Staikouras on Friday.

The 2021 budget envisages that the primary deficit will reach 7.2 percent of GDP this year (11.760 billion euros), falling to 3.9 percent of GDP (6.67 billion) in 2021, while the public debt is expected to reach 208.9 percent of GDP, falling to 199.6 percent of GDP in 2021.

The unemployment rate is projected to rise to 18.9 percent in 2020, from 17.3 percent in 2019 and to fall to 17.9 percent of the workforce in 2021.

The state budget also envisages that government support measures for enterprises and workers will soar to 31.4 billion euros, including 23.9 billion this year and 7.5 billion 2021.

These measures will have a positive impact on real GDP of around 7.0 percentage points in 2020, with 3.3 of those percentage points occurring in the fourth quarter of the year.

Private investments are projected to jump by 23.2 percent in 2021 after falling by 14.3 percent this year, while the adjusted inflation rate will return to positive ground — 0.6 percent — in 2021, up from -1.1 percent on average this year.

Tax revenues are projected to grow to 47.8 billion euros in 2021 after shrinking to 44.2 billion this year, while budget spending will remain at very high levels (67.2 billion euros) in 2021, just down from 69.3 billion this year.

Source: AMNA

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