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Economy

Greece Counting on Tourists for Big Rebound During Pandemic

ATHENS – Greece’s biggest revenue engine – tourism – is the best hope to pull the country out of economic setbacks caused by the lingering COVID-19 pandemic, officials said, with early arrivals bigger than expected.

Prime Minister Kyriakos Mitsotakis long ago turned his attention away from the Coronavirus health crisis toward trying to accelerate an economic comeback, easing health restrictions to lure more foreign visitors.

Tourism accounts for up to 18-20 percent of the Gross Domestic Product (GDP) of 187.39 billion euros ($200.3 billion) and at its peak before the pandemic hit in 2020 and nearly shut town international travel, it employed nearly a million workers in the sector.

The tourists are returning in big numbers and American airlines added more direct flights to deal with pent-up demand as the country is essentially totally open again for the first time in three years.

Tourism in 2021 brought in a scant 11 billion euros ($11.76 billion) compared to the record 18.2 billion euros ($19.46 billion) in 2019 and the Finance Ministry has projected a 3 percent growth rate for the economy this year.

Even if arrivals are below those of 2019, inflation and quality upgrades may well take revenues up to par with those of three years ago, economists estimate, said Kathimerini about the prospects.

That would see the national economy outperform the Eurozone average, as analysts only see Greece and Italy preserving their growth rate thanks to tourism, the report also added.

There is a caveat – that easing the COVID restrictions by letting anti-vaxxers mix with the vaccinated, no masks and no social distancing – could see the pandemic come back hard in the fall and require more tough conditions.

Some banks and investment firms, urging caution, are talking about a possible recession toward the end of the year or early in 2023 and Greek officials worry if it happens that it could hold back German tourists, a key market.

The government does have, however, some 32 billion euros ($34.21 billion) in EU COVID relief loans and grants – no account where it’s going – but some has been diverted toward 5G telecommunications projects for better Internet.

With elections coming in 2023 and the government eager to appease voters, Finance Minister Christos Staikouras – who said there wasn’t enough money for more aid to help households beleaguered by rising costs for everything from food to energy – to say there now likely will be, not explaining the contradiction.

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