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Up to 13% recession in Greece due to lockdown, says FinMin Staikouras

Greece’s economy may shrink by 10-13 percent this year following the lockdown to stem the spread of the coronavirus, Finance Minister Christos Staikouras said on Wednesday. The government will take steps to mitigate the impact of the recession and support businesses aiming for a gradual f recovery to pre-crisis levels from September, the Minister told Real FM.

The lockdown imposed to prevent the spread of corona could lead to a 10% to 13% drop in GDP this year, he said adding that the recession could be reduced to 5% -8% with government and corporate support measures.

Asked why the European Commission forecasts are worse, he said: “I urge you to show this in the afternoon as well. The European Commission claims that the government reacted very quickly and took measures to pave the way for a speedy recovery.. Therefore, the European Commission first agrees with the measures taken by the Greek government in the field of the Greek economy. Secondly, it claims that the recession will be deeper in Greece this year due to the fact that we are heavily dependent on tourism. But at the same time, it argues that next year the recovery for Greece will be higher than in all European countries.”

Staikouras added that “no one disputes that this year the country will go through a deep recession, like the whole of Europe,” he added.

Speaking about government measures to boost the tourism and the economy, Staikouras said that form June to September, the government will continue and expand employment support measures, further strengthening of liquidity, adopt targeted tax measures and treatment of citizens’ private debt.

Stabilization of the economy essentially starts after September,” he said.

Staikouras stressed that the Greek economy has the weapons to withstand a possible new wave of coronavirus  cases in the fall. “If we have any adverse developments, which I do not wish for – and I believe that appropriate medication will be found by then – and the problem returns to some extent or intensity, then we have the opportunity to cope with those situations.”

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