IMF sees Greek economy shrinking by 9.5% in 2020

Meghann Showers

ATHENS, Oct 2 (Reuters) – The International Monetary Fund sees the Greek economy contracting by 9.5% this year before returning to growth in the medium-term, the Washington-based Fund said in a report on Friday. Greece emerged from its third international bailout in 2018, after a decade-long debt crisis. Its lenders, […]

ATHENS, Oct 2 (Reuters)The International Monetary Fund sees the Greek economy contracting by 9.5% this year before returning to growth in the medium-term, the Washington-based Fund said in a report on Friday.

Greece emerged from its third international bailout in 2018, after a decade-long debt crisis. Its lenders, the euro zone and the IMF, are still monitoring its economic progress which has been hit hard by restrictions due to the coronavirus pandemic.

The country will register a 6.75% of GDP primary budget deficit this year due to both lower economic activity and the government’s stimulus measures, the Fund said.

Greece’s economy has been hurt by the impact of a nationwide lockdown in the second quarter and a slump in tourism revenues.

“Greece’s heavy reliance on tourism makes it particularly vulnerable. A rebound is expected in 2021–22 to reach an average 5% growth annually,” the IMF said.

Following a spike in 2020, Greece’s public debt – the highest in the euro zone as a percentage of GDP – is projected to decline gradually over the medium-term, the Fund said.

(Reporting by Lefteris Papadimas and Renee Maltezou)

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