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Greece Economic Snapshot

Going for Growth 2021 - Greece

The COVID-19 crisis adds urgency to addressing Greece’s long-standing challenge of boosting investment and productivity to diversify the economy and improve job creation. Despite continued progress in reform efforts, such as digitalising the public administration, red tape, low-quality regulations, and a slow justice system mar the business environment. Coupled with significant gaps in the workforce’s skills, these inhibit firm growth and discourage innovation and investment.

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2021 Structural Reform Priorities

  • Improve investment climate: Enhance efficiency and effectiveness of public administration and the legal system
  • Financial system and investment: Restore banks’ health and improve the execution of the public investment budget
  • Labour market: Strengthen active labour market programmes
  • Education and skills: Improve the quality of childhood education, schools and tertiary education
  • Social protection: Modernise programmes, targeting and administration

 

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Economic Forecast Summary (December 2020)

Greece’s economy is set to contract by 10% in 2020 and to recover gradually in 2021, as ongoing virus outbreaks and restrictions weigh on services activity, exports, employment and investment. In 2022, the recovery is projected to accelerate, as the virus is better controlled with a vaccine having become more generally deployed, restrictions being eased globally and the government implementing new investment projects. Controlling the pandemic sooner would hasten the recovery, reducing risks of rising insolvencies, non-performing loans and declining well-being.

Extending and expanding support for households suffering income loss as the crisis continues would limit the drag on consumption and well-being, without locking workers into activities facing weak demand. Extending and better targeting liquidity support would help viable firms to stay in business. The draft 2021 budget prioritises cuts to personal income tax and social contribution rates, which will support longer-term employment growth. Strongly expanding effective training programmes would help to ensure that workers have the skills that the labour market will need after the crisis.

Economic Survey of Greece 2020

Executive Summary

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