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Economy

Greek Economy to Contract by 10.5% in 2020, Grow by 4.8% in 2021

November 20, 2020

ATHENS — The Greek economy is expected to contract by 10.5 pct this year and to grow by 4.8 pct in 2021, according to provisions included in the new state budget, which was tabled in Parliament by Finance Minister Christos Staikouras on Friday.

The 2021 budget envisages that the primary deficit will reach 7.2 pct of GDP this year (11.760 billion euros), falling to 3.9 pct of GDP (6.67 billion) in 2021, while the public debt is expected to reach 208.9 pct of GDP falling to 199.6 pct of GDP in 2021. The unemployment rate is projected to rise to 18.9 pct in 2020, from 17.3 pct in 2019 and to fall to 17.9 pct of the workforce in 2021.

The state budget also envisages that government support measures for enterprises and workers will soar to 31.4 billion euros (23.9 billion this year and 7.5 billion 2021). These measures will have a positive impact on real GDP of around 7.0 percentage points in 2020, of which 3.3 percentage points in the fourth quarter of the year. Private investments are projected to jump by 23.2 pct in 2021 after falling by 14.3 pct this year, while harmonised inflation rate will return to positive ground (0.6 pct) in 2021 from -1.1 pct on average in 2020.

Tax revenues are projected to grow to 47.8 billion euros in 2021 after shrinking to 44.2 billion this year, while budget spending will remain at very high levels (67.2 billion euros) in 2021 from 69.3 billion this year.

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