A report released by the
IMF on the prospects of the World economies, the recession in Greece is
expected to be 9.5% for 2020, while in 2021 the economy will turn to growth and
is expected to grow by 4.1%.
The IMF’s expectations of
recession for the southern European nations are: Spain -12.8%, Italy -10.6%,
Portugal -10.0%, and France -9.8%. For the years 2021 and 2022 IMF predicts
growth in GNP which mainly will come from the pandemic relief funding of the
EU.
Greece is expected to
receive €33.4 billion from the pandemic fund, which corresponds to 17.8% of the
Greek GNP. Italy’s funding will correspond to 20% of GNP, and Spain’s funding
19% of GNP. According to the proposal by the EU commission, 93.5% of the total
fund relief (which is €750 billion) is estimated to be used for public
investments, mainly thru funding as well as in the form of loans.
The remaining 6.5% is to
be used as guarantees for funding private investments. The report released by
the IMF in the beginning of October 2020, points out that recession will
continue for the second quarter of 2021 at a worldwide level and having a
negative impact on Tourism, as to the timing of the funds to be received it is
uncertain.
Greece’s public debt will start to subside as a percent of GNP in 2021, which is 200.5%, 187.3% in 2022, and 177% in 2023.
Public expenditures in
Greece are also expected to decline in the coming years: 57.3% of GNP in 2020,
51.3% in 2021, 50.1% of GNP in 2022, and 49.5% of GNP in 2023. Public expenditures
will remain below 50% until 2025.
Bill T. Alexandratos
