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Greek Economy “Shows Resilience”; Contraction in 2020 Less than Expected

The Greek economy in better shape
The Greek economy is in a better shape than expected. Credit: LBM1948, CC BY-SA 4.0/ Wikimedia Commons

The Greek economy is in a better shape than it was feared according to official data released on Friday.

The Hellenic Statistical Authority announced better-than-expected GDP figures for 2020, with the country’s Gross Domestic Product contracting by 8.2% to 168.5 billion euros from 183.6 billion in 2019.

This compares with the government’s estimate for a 10.5% contraction, included in the 2021 budget, and the latest European Commission forecast for a 10% drop.

That figure is still worse than the eurozone average of -6.8% and the European Union average of -6.4%. However, it is better than Italy’s -8.8% and Spain’s -11.2%.

The Hellenic Statistical Authority said that Greek GDP shrank by 7.9% in the fourth quarter compared with the same period in 2019, but rose 2.7% in comparison with the third quarter of 2020.

More specifically, final consumption spending fell 3.4%, private investments (gross fixed capital investments) rose 4.9%, exports of goods and services fell 21.7% and imports of goods and services fell 6.8%.

On a quarterly basis (fourth quarter 2020-third quarter 2020), final consumption spending fell 1.4%, gross fixed capital investments rose 1.0%, exports of goods and services rose 31.8% (goods up 4.9% and services up 10.3%), while imports of goods and services eased 3.6% (goods down 1.2% and services down 9.9%).

Greek economy shows resilience

Commenting on the GDP data, Finance Minister Christos Staikouras said that although it was strongly shaken, the Greek economy showed resilience in conditions of unprecedented health, social and economic adversity.

Staikouras said the GDP contraction rate was less than the forecasts because of the revision of the previous quarter and the good performance in the fourth quarter, which compared with the third quarter of 2020 seemed to be the best performance in Europe.

“These figures certify the correctness of our economic policy,” he noted, adding that 2021 is a difficult year.

“The challenges are many and great, but we can be realistically optimistic since, with the help of science, we are erecting a protective wall through vaccinations and moving towards a return to normality in social and economic life,” Staikouras underlined.

“In these conditions, with efficient, socially sensitive and fair economic policies, along with the anticipated start of money inflow from the Recovery Fund, we will work to counteract the repercussions of the crisis.

“We continue, with faith in the country’s outlook, responsibility towards all citizens, a plan, hard work, calm and justice, so that all together, state, citizens and enterprises recover as fast as possible and lay the foundations for a high, sustainable, smart and socially fair growth,” Staikouras added.

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