Greece’s virus recovery forecasts are over-optimistic

Significance

The authorities are gradually lifting pandemic-induced restrictions. The need to protect public health has given way to preserving the productive capacity so painfully built up in three years of economic recovery. The authorities hope for a V-shape recovery in 2021, driven primarily by a large fiscal stimulus.

Impacts

• An unprecedented fall in the tourism sector will depress real estate market values.
• Greater flexibility in the EU fiscal framework would rekindle Athens’ efforts to reduce its primary budget surplus target.
• The government’s handling of the pandemic could promote the image of Greece as a relatively safe country to visit.