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Economy

Report: Greek Economy Could Return to More Positive Growth Rates in 2021

October 31, 2020

ATHENS — The Greek government will have to deal with three basic shortcomings in the post-Covid-19 era, professor Panagiotis Liargovas, president of the Centre of Planning and Economic Research (CPER) said in a quarterly report on economic developments in the country.

"In a battle between humans and the pandemic there is a certainty: humans will prevail. When this happens, the pandemic will look like a dramatic parenthesis in society and economy. At that point, we must continue our work and deal with three basic shortcomings, challenges for the country: productive, demographic and institutional," Liargovas said.

He underlined that the productive shortfall is attributed to the stalemate in which the country has fallen due to its commitment to high primary surpluses. "Gradually, Greeks will become poorer and the country will be downgraded on an income basis," he noted.

The demographic problem is acute, with the population rapidly falling since 2010 mainly due to the immigration of young people (brain drain) to foreign countries. After 2020, a dramatic increase of pensioners is expected, making Greece the second most ageing country in the EU.

The institutional challenge refers to the regulatory quality of the state, rules of justice, stability and non-use of violence, efficiency of the civil administration and combating corruption.

CPER said that uncertainties related to the second wave of the pandemic were reflected in the 2021 draft budget plan tabled to Parliament by the government. It added, however, that the Greek economy could gradually recover and return to more positive growth rates in 2021.

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