Report: Greek SMEs Feel the Covid-19 Effect

Photo Source: athensattica.com/

The outbreak of Covid-19 impacted Greece’s small and medium-sized businesses (SMEs) as much as the economic crisis in 2009 and the capital controls imposed in 2015, according to a report released this week by the National Bank of Greece.

More specifically, the SME confidence index fell in the first half of 2020 by 34 points back in the negative (minus 8 points) for both small and medium-sized enterprises.

The report notes that the coronavirus crisis brought the previous upward dynamic to a halt creating uncertainty for the future as demonstrated by the 87-point decline in the future demand index – the largest drop in the last decade. At the same time, SME growth targets also weakened from 71 percent to 37 percent.

Hardest hit are SMEs active in the automobile industry, tourism and retail trade, as demonstrated by the survival index, which in these sectors exceeded 40 percent.

Photo source: European Parliament / © Antic/AdobeStock

According to National Bank analysts, one-third of SMEs holding strong due to improved sales, liquidity, and profitability will find it easier to stand up to the challenges of the Covid-19 era.

The report found that medium-sized enterprises are better equipped to face the Covid-19 effect (45 percent) compared to micro-enterprises with 47 percent facing hardship.

With regard to tourism, the report’s analysts said 61 percent of businesses are better equipped to absorb the Covid shock due to a previous decade of strong growth.

The same applies to the F&B sector with 43 percent of businesses in better shape retaining export activity during the pandemic.

On the downside, retail, apparel and other industries will need support as half of all SMEs are facing similar conditions with those of 2008 at the start of Greece debt crisis.