Coronavirus squeezes Greek economy by 15% in Q2 2020

The coronavirus dealt a huge single-quarter blow to Greece’s economy, official data showed on Thursday, September 3, though Athens hopes that recent months will show a tourism-driven rebound.

“The COVID-19 pandemic and the restriction measures that were put into place” sent gross domestic product (GDP) plunging by 15.2% in the 2nd quarter compared with the same period a year earlier, the state statistics agency said.

Exports collapsed by almost one-third and consumption also dropped sharply.

Greece reopened its borders from July 1 to limit the harm to its vital tourism sector, but then saw coronavirus cases surge in August.

More than half the country’s 10,500 cases were recorded last month and officials have blamed the spike in infections on flouting of social distancing rules in restaurants, bars, and public gatherings.

But even with a general lockdown ruled out, the number of visitors has not lived up to expectations.

The Greek tourism confederation (STE) warned last month that tourism revenue would fall well short of a hoped-for 5-billion-euro ($6-billion) influx – itself a fraction of last year’s income.

Prime Minister Kyriakos Mitsotakis has warned that Greece will fall into a “deep recession” this year before rebounding in 2021.

The Bank of Greece forecasts the economy will contract by 5.8% in 2020, while the International Monetary Fund’s forecast is more pessimistic at 10%.

In comparison, business activity fell by 7.1% in 2011, the biggest annual drop during the decade-long Greek debt crisis.

Athens nonetheless remains able to raise money on financial markets, which was not the case then.

Between 2009 and 2018, Greece suffered its worst economic crisis in modern times, and had begun to slowly regain some of the lost ground before it was hit by the impact of coronavirus restrictions. – Rappler.com