3 minute read 16 Jun 2020
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COVID-19:Three potential economic scenarios for the Greek economy

By

Tassos Iossiphides

EY Greece Partner, Head of Strategy and Transactions. EY Greece Energy & Utilities Sector Leader. EY Central, Eastern and Southeastern Europe & Central Asia (CESA) SaT Technology, Media and Telecommunications (TMT) sector Leader

Value driver. Passionate about diversity in business.

3 minute read 16 Jun 2020

The sudden outbreak of COVID-19 has had an immense impact on the global economy, disrupting normal economic activity and everyday life. The pandemic forced a lockdown of the economy in a majority of countries, with the shutdown of businesses and the rapid introduction of remote working, thrusting us into a new environment, to which companies were called to adapt, as a matter of urgency.

While it is generally accepted that Greece has successfully handled the public health aspect of the pandemic, it will undoubtedly feel the sting of the COVID-19 crisis on its economy, with a sharp contraction expected for the second quarter of 2020, as a direct consequence of the prolonged lockdown.

At EY, acknowledging that this is an ever-evolving situation, we have attempted to analyze the potential impact of the COVID-19 pandemic on the Greek economy, by sector of economic activity. Drawing from publicly available information (reports, surveys, analyses, etc.), we have evaluated the peak impact of the pandemic on each sector and assessed the overall impact on the country’s economy, under three different scenarios – optimistic, base and pessimistic.

According to our findings, Greece will witness a contraction of its 2020 Gross Value Added (GVA) between 7.1% to 12.5% (based on the optimistic and pessimistic scenarios, respectively), while base scenario contraction is close to 9.5%. Losses in employment, including those generated during and those that will come after the lockdown, are expected to be less substantial compared to GVA losses, yet will be significant, nonetheless. In 2020, employment in Greece will witness a year-on-year change between 3.1% and 5.4%, while our base scenario estimates a contraction of 4.1%.

Economic contraction in 2020

9.5%

loss in Gross Value Added, as per EY’s base estimation of the impact of COVID-19 on the Greek economy

The report features an extensive presentation of the impact of the pandemic on GVA and employment per sector, while also focusing on the potential impact of the outbreak on the Greek tourism industry, due to its high contribution to the national economy. Furthermore, the report takes a comparative look at the two greatest crises the country has faced in the past ten years, juxtaposing the COVID-19 impact per sector with the impact sustained during the 2009-2016 economic crisis.

To access EY’s “Potential economic scenarios for Greece and their impact by sector” report, click here.

 

Summary

As the COVID-19 pandemic continues to take its toll on the global economy, EY Greece takes a look at three different economic scenarios for the Greek economy, examining the impact of the outbreak on the country’s sectors of economic activity.

About this article

By

Tassos Iossiphides

EY Greece Partner, Head of Strategy and Transactions. EY Greece Energy & Utilities Sector Leader. EY Central, Eastern and Southeastern Europe & Central Asia (CESA) SaT Technology, Media and Telecommunications (TMT) sector Leader

Value driver. Passionate about diversity in business.