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%.