ΑΤΗΕΝS — The Greek economy is expected to grow by 2.7 pct in 2021, under the base scenario of the Parliament’s State Budget Office’s economic outlook report released on Tuesday.

Presenting the report, Frangiskos Koutentakis, head of the Office, said that these estimates were carrying a significant level of uncertainty, based both on developments in the pandemic and restrictive measures and from possible fiscal interventions and the exploitation of funds from the Recovery Fund.

Officials said they expected the Greek economy to contract by 7.0 pct in the first quarter of 2021 and that this trend will be reversed from the second quarter onwards. The report also presented two more scenarios based on the possibility of an additional fiscal intervention worth 5.0 billion euros through transfers or in public consumption. “In the first case, the growth rate will reach 3.65 pct, while in the second the grow rate will reach 4.84 pct,” it noted.

The report stressed that despite adverse economic and fiscal developments, the country’s credit rating remained strong, as shown with the successful completion of a 30-year bond issue, and underlined that a possible acceleration of vaccinations and a gradual easing of restrictive measures by the summer could positively contribute in economic activity, mostly through tourism.

It also noted that a more flexible fiscal policy did not justify any complacency, adding that accumulated debt during the pandemic will put pressure on state budget after the withdrawal of state bond purchases by the European Central Bank.

The report also underlined the risks from a rising private debt. Non-performing private debt totaled 242.6 billion euros in 2020: 108.1 billion to the tax agency, 37.5 billion to social insurance funds, 58.1 billion to banks and 38.9 billion euros to domestic loan and credit management firms. This number is not up compared with 2019, but it is expected to rise significantly when the implementation of repayments restarts.