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IOBE: Greek Economic Recession to Range between 5-10% This Year

Αssociated Press

FILE- Two street vendors talk each other outside the main fish market of Athens, Monday, Aug. 20, 2018, on the day that Greece's eight-year crisis will be officially over. (Panayiotis Tzamaros / InTime News via AP)

ATHENS - An economic recession in Greece will range from 5-10 pct this year and a significant cost on enterprises and households cannot be avoided, Nikos Vettas, Director General of the Foundation for Economic and Industrial Research (IOBE) said on Wednesday.

Presenting IOBE's quarterly review on the economy, Vettas said the coronavirus pandemic is expected to become the most determining factor for employment trends this year, with the size of its impact depending on its duration and a possible new wave later in the year. The impact will come both from domestic and external factors, as emergency restrictive measures abroad will affect demand of Greek products, while a suspension in air travel will hit the sectors of tourism and transport.

A domestic lockdown, despite emergency support measures, will raise unemployment, while household demand will fall. The negative side effects of restrictive measures will expand in investment decisions as well, while increased demand in the sectors of healthcare, social welfare, internet services and courier will have positive effects on employment. IOBE expects the unemployment rate to rise by 2-4 percentage points this year.

Vettas said that the Greek economy is entering into a new crisis with known weaknesses: structural weaknesses, low competitiveness, partial structural adjustment and very high public debt and high NPEs. He noted that Greece has no room of losing its fiscal stabilization course, and stressed the importance of credibility of economic policy.