Financial and business news from Bulgaria

Greek economy to experience triple shock over measures

The Greek economy will shrink by 4.7 percent this year as a result of measures taken to combat the pandemic, reports in. “Kathimerini”, referring to an updated report from the Ministry of Finance sent to the European Commission under the European Semester process.
According to the report, the Greek economy will experience a triple shock - a temporary, but very strong, in supply, as quarantine reduces production of goods and services, as well as revenues from producers and workforce; a second strong blow will be in demand as quarantine reduces consumption, and the third is related to uncertainty, as the duration and intensity of the crisis remain unpredictable, BTA informed.

The forecast for a 4.7 percent economic recession this year is based on an assumption that the health crisis will gradually weaken in the first half of the year, and the economic consequences will be felt in the second quarter.

The unemployment rate is expected to rise from 17.3 percent in 2019 to 19.9 percent in 2020 and fall to 16.4 percent in 2021. Inflation is expected to return to 2019 levels of minus 0.3 percent and reach 0.6 percent in 2021.

According to forecasts, private consumption will decline 4.1 per cent this year, but is expected to grow 4.2 per cent in 2021.

A decline is also expected in private investment - a 4.6 per cent drop is forecast for 2020, but a 15.3 per cent jump is expected for 2021.

The primary budget surplus is expected to decrease significantly against the target of 3.5 percent of gross domestic product in 2020. The finance ministry also predicts a return to growth in the Greek economy of 5.1 percent in 2021.