The nightmarish data released by the Hellenic Statistical Authority yesterday were largely expected. In the second quarter GDP plunged by 15.2 percentage points due to the coronavirus pandemic lockdown.
That is the biggest post-war drop and it directly reflects the economic impact of the pandemic.
One should note that the average GDP drop in the eurozone is slightly smaller. International organisations’ predictions that Greece would experience the deepest recession in Europe were belied.
Finance ministry officials insist on their projection that there will be an 8 percent drop in GDP this year and that growth will return in 2021.
This expectation is linked to two preconditions. Firstly, transmission must be checked until spring. Secondly, there cannot be any military clashes or warlike conditions in the Aegean.
If all that occurs one can expect better days for the economy. Moreover, European Recovery Fund money will start flowing in the spring.
That is why Moody’s deemed Greece’s credit rating as sustainable despite the drop in tourism.
Another indication of trust in the Greek economy was the re-issuance of a ten-year-bond with the yield at an historic low.
There can be no doubt that this will be a very difficult winter as the PM conceded when he said he has saved back-ups and materiel to fight through tough times.
It is certain that much will be needed.