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Greek Economy to Grow by 3.5% in 2021, EU Forecasts

Greek economy to grow by 3.5%
Greek economy to grow by 3,5%, the European Commission says. Credit: By EmDee – Own work, CC BY-SA 4.0,

The Greek economy will grow by 3.5 pct this year and 5.0 pct in 2022, the European Commission said in its winter economic forecasts released on Thursday.

In the report, the EU’s executive said economic recovery will continue, supported mostly by private consumption due to a gradual reopening of retail commerce, improving consumer confidence and a supportive fiscal policy.

Net exports are expected to positively contribute to economic growth in 2021 and 2022, while a vaccination program is expected to support a gradual return of tourists in Greece.

The Commission said that Greek GDP grew by 2.3 pct in the third quarter of 2020 after the reopening of the economy and a temporary easing of restrictive measures.

It notes, however, that the re-introduction of restrictive measures in the fourth quarter of the year is expected to lead to a contraction of GDP in comparison with the third quarter.

Greece’s GDP is expected to have contracted by 10 pct in 2020.

Unemployment stood at 16.7 % in October 2020, similar to a year before, indicating that the labor market
impact of the economic crisis remains relatively contained, the report says.

Employment however decreased, primarily due to lower hirings in the tourist sector.

EU economy to grow by 3.7%

The winter economic forecasts report said that the Eurozone economy will grow by 3.8 pct in 2021 and 2022, while the EU economy is expected to grow by 3.7 pct in 2021 and 3.9 pct in 2022.

Credit: EC-GISCO

The inflation rate is expected to rise from 0.3 pct in 2020 to 1.4 pct in 2021 and ease to 1.3 pct in 2022.

The Commission says that the euro area and EU economies are expected to reach their pre-crisis levels of output earlier than anticipated, largely because of the stronger than expected growth momentum projected in the second half of 2021 and in 2022.

After strong growth in the third quarter of 2020, economic activity contracted again in the fourth quarter as a second wave of the pandemic triggered renewed containment measures.

With those measures still in place, the EU and euro area economies are expected to contract in the first quarter of 2021.

Economic growth is set to resume in the spring and gather momentum in the summer as vaccination programmes progress and containment measures gradually ease. An improved outlook for the global economy is also set to support the recovery.

The economic impact of the pandemic remains uneven across Member States and the speed of the recovery is also projected to vary significantly.

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