The Greek economy is set to contract by 9.7 percent in 2020 because of the COVID-19 pandemic, the European Commission forecast on Wednesday.
Greece, along with Italy, Spain and Portugal, will be among the hardest hit nations by the economic effects of the pandemic.
It is believed that Italy will record the second deepest recession, amounting to 9.5 percent GDP loss, followed by Spain, with 9.4 percent.
“Economic activity in Greece, Italy, Spain, Croatia, and to a lesser extent France, are forecast to contract the most,” said Paolo Gentiloni, European Commissioner for the Economy, during a press conference.
According to the Commission, Greece’s main export markets are also expected to suffer strong declines in 2020, leading to a drop in demand for Greek goods and services.
“Despite the swift policy response, the strong contraction in output is forecast to take a toll on employment,” the Commission states.
A recent report released by the Federation of Hellenic Enterprises (SEV) did find that Greece’s unemployment rate would record the biggest increase in a decade, but the Commission says a partial economic recovery in 2021 will lessen the pandemic’s impact on labour.
“The partial recovery in 2021 is expected to have positive effects on the labour market, bringing the unemployment rate down from 19.9 percent in 2020 to about 16.5 percent.”
With Greece slowly returning to normalcy following the loosening of COVID-19 restrictions, only time will tell what the true economic impacts of the pandemic will be.