Losses in billions in turnover and economy – The dip in GDP since 2011



The new forecasts of the Commission for a recession of 9% in Greece are causing concern. The effects of the new wave have not been fully incorporated into the Commission’s calculations and the finance staff is rewriting the 2021 budget, which will be tabled on 21 November. As the restrictive social measures will last at least until the first months of 2021, the scenario of a rapid recovery is removed with the new forecasts foretelling a slow return to the pre-pandemic era, which leaves a legacy of high deficits and unemployment. emergency financial measures, which will be reviewed based on the course of the crisis, where it is preparing for a support scenario until April 2021. Therefore, the Greek budget is being rewritten and the forecast for recession at 8.2% this year seems to be revised and prevailing. the estimate close to 10%. The primary deficit will be further burdened this year where the bill, due to the second wave, is already increasing to 3.3 billion euros, with the loss of revenue estimated at over 1-1.5 billion euros. It is noted that the 2021 recovery was estimated at 5.5%, as a baseline scenario, raising the bar to 7.5% due to the Recovery Fund, with new estimates now showing a reduction in the recovery to 4-5%. However, the second wave may pass as a roller coaster from the European economies and the lack of vaccine has restored the unfavorable scenarios for a lasting contraction. Recently, IOBE reported a chance of maintaining the recession in 2021 in a range from 2.5% to 4%, in case there is no vaccine. For this year, before the second wave, the draft of the Ministry of Finance predicted a collapse of tax revenues to 44 billion and fiscal deterioration led to a total deficit of 14.7 billion euros or 8.6% of GDP, while the primary deficit in 2020 is estimated at 9.7 billion euros (5.7% of GDP). Based on the general lockdown of the period March – April, the GDP dip in the second quarter was 15.2%, while according to estimates by the Ministry of Finance the monthly cost of a total lockdown in GDP is about 2-3%. The contribution of the Attica Region to the economy reaches 86 billion euros – and especially of the center of Athens exceeds 30 billion euros, which means that more than 47% of GDP is produced in the Basin. It is estimated that a possible 15-day lockdown in Attica will cost the economy 500-600 million euros. Market participants estimate that a fortnightly lockdown in Attica, which will involve anthropogenic activities such as trade, services and catering, will cost a reduction of at least 0.5% of annual GDP, ie turnover losses of about 1 billion euros, putting at risk an additional 110,000 jobs. The median income will lose another 800 million euros and the red loans will increase by 8 billion euros, while the debts by 1.5 billion euros. From the first reactions of the market players it seems that the losses are followed by financial measures of the government. , but the 26.2 billion euros so far, plus the additional measures of 3.3 billion euros, are far behind the 35 billion euro turnover losses to date, which are estimated, according to the Piraeus Chamber of Commerce and Industry, as will reach 50 billion euros by the end of the year.According to the latest data of catering factors, turnover is 60% lower than last year, before the decision for a new lockdown. It is estimated that if this trend continued, ie without lockdown, by the end of the year the annual turnover might have reached 2 billion euros, from 5 billion euros in 2019. Around 80,000 businesses are active in the catering industry, most of them family-owned. The number of employees reaches 330,000 while another 100,000 are the so-called “assisting members”, such as the wife, children, etc. It is estimated that the industry affects close to 1 million jobs, from the primary sector to industry and services. The Commission’s autumn forecast records the huge economic loss due to tourism and sees a drop in tourist traffic by 65% ​​-71%, while in Greece the largest drop in overnight stays of 80% is estimated. The blow to exports is 30% and the Commission notes that the country has been hit hard by the health crisis due to the services sector and dependence on the international tourism market. Recession, deficit, unemployment The Commission forecasts a drop in Greek GDP to 9% this year, which is the fifth strongest fall in the Eurozone after Spain, Italy, France and Portugal. The Commission raises the bar for Greece’s recovery to 5% in 2021, from 7.9% in the previous report, and sees 3% growth in 2022. Unemployment is expected to reach 18% in 2020 and close to 17% in 2022 , with Spain coming in second with unemployment at 16.7%. For the whole Eurozone, it sees a contraction of 7.8% and reduces next year’s growth to 4.2%. from 6.1% forecast in July, while it estimates that there will be 3% growth in 2022. It is noted that the economy of the Eurozone will shrink by 0.1% in the last quarter, compared to the third quarter of the year. Unemployment is expected to reach 18% in 2020, with Spain coming in second with 16.7%. As a result of fiscal support measures and the high recession, the Greek government deficit will increase to close to 7% of GDP. in 2020. According to the Commission, the expected gradual economic recovery and the end of emergency measures are expected to reduce the general government deficit to about 6% of GDP in 2021. Debt will explode in Greece which will increase this year to 207% of GDP in Greece and will be reduced in 2022 to about 195% of GDP. The overall government deficit in the euro area will increase from 0.6% of GDP in 2019 to around 8.8% in 2020, before shrinking to 6.4% in 2021 and 4.7% in 2022. in March, it finances the support measures almost exclusively from the cash available as about 1.2 billion euros have flowed in so far for COVID expenses and from the SURE program are expected at the end of November to 1.3 billion euros. In the spring in the state coffers there were 37 billion euros and at the present stage it is at 37, 5 billion euros. In other words, it was maintained at this level, mainly, with the pumping of liquidity from the markets and this liquidity cushion gives some flexibility, but the new outbreak of the coronavirus gives a signal for prudent measures, where depending on the conditions they will expand beyond 24 billion. provided for in the preliminary draft. It is noted that with the outbreak of the pandemic, in the first half of 2020, the government received a series of interventions and according to the budget, these interventions are worth a total of 24.156 billion euros, of which 21.468 billion euros relate to 2020 and 2.688 billion billion are expected to affect the fiscal result of 2021. Follow it on Google News and be the first to know all the news See all the latest News from Greece and the World, at



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *