ATHENS – A second lockdown aimed at slowing the spread of COVID-19 – which hasn't worked yet – will also further undercut Greece's faltering economy with another shock worse than first though, Bank of Greece Gov. Yannis Stournaras said.
It could have been even tougher as Prime Minister and New Democracy leader Kyriakos Mitsotakis said he waited too long to being a second closing of non-essential business and require people to mostly stay home.
That indecision was over fears that the economy, that had been recovering faster from a near decade-long crisis worsened by austerity before the pandemic hit earlier this year, couldn't take another hit.
Mitsotakis said he was trying to balance saving lives against propping up the economy that put him in essentially a no-win position as something had to give, with some businesses – especially restaurants – expected to close for good.
Speaking during the American-Hellenic Chamber's 31st annual Greek Economic Summit, Stournaras said the plummeting of economic activity in the fourth quarter of 2020 will be greater than previously expected.
The lockdown began Nov. 7 and was supposed to lift Dec. 1 but was extended to Dec. 7 after it failed to rein in the Coronavirus spread, the closings likely to continue until before or even after Christmas, ruining a critical revenue period.
The recession in the first half of the year recorded a 7.9 percent reduction in the country's Gross Domestic Product (GDP) of 166.27 billion euros ($200.3 billion) at the same time the country is locked into paying back 326 billion euros ($392.72 billion) in three international bailouts that ended Aug. 20, 2018.
Stournaras, a former finance minister for a New Democracy government spoke the same day the Paris-based Organisation for Economic Co-operation and Development said Greece's economy will fall at least 10.1 percent this year and that a 2021 recovery – if the pandemic ends – would be only 0.9 percent as things go.
Real GDP growth will return in 2022, the OECD said, but still not covering 2020's losses, with growth of 6.6 percent forecast, said the Greek business newspaper Naftemporiki.