Greece’s Centre of Planning & Economic Research (KEPE) is forecasting a slowdown in growth by 0.9 percent this year in the aftermath of the coronavirus (COVID-19) outbreak.
In its bulletin released last week the think tank presents three scenarios and the potential economic impact of the pandemic on the sectors driving the Greek economy.
According to KEPE, coronavirus repercussions will mainly affect medical services, welfare and treatment; tourist and travel services, catering and other services (conferences, exhibitions, entertainment and entertainment); trade and transport; global supply chains; investment projects; private consumption; prices of raw materials, other goods and services; labor market; and money markets.
Three scenarios: Mild, modest & worst-case
KEPE’s “mild scenario” sees the pandemic limited and controlled in March. In that case it expects a decrease in annual real GDP growth rate by 0.1%-0.3% for 2020 compared to current forecast; a mild impact on tourism, trade and transport; and a marginal impact on consumption and investment.
A “moderate scenario” sees the pandemic controlled within the second quarter of 2020. In that case, KEPE sees a decrease in annual real GDP growth rate by 0.4%-0.6% for 2020 compared to current forecast; increased needs for medical services; and a moderate impact on consumption and investment.
KEPE estimates that in a moderate scenario Greece’s tourist traffic will be affected during Easter, May and the first month of the summer. “The impact on imports and exports will be more intense,” KEPE said.
In the “worst-case scenario”, eg the epidemic extends into the third quarter of 2020, KEPE forecasts a decrease in annual real GDP growth by 0.7%-0.9% for 2020 compared to the current forecast as well as considerable expenditure on health care and treatment.
Significant impacts are also expected on tourism, trade and transport, in the worst-case scenario. “Tourist traffic will be affected during the summer and until the end of September. Imports and exports will also be severely hit,” KEPE notes, also highlighting that investments will also be affected.
Industry is also expected to be hit hard due to disruptions in international supply chains.
KEPE analysts underline the importance of enhancing health services, protecting vulnerable groups and supporting the most vulnerable sectors as well as local communities with measures.