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Greek GDP declines by 10% in 2020; Public Debt rises to 227% GDP

The European Commission has released the European Economic Forecast Winter 2021. According to its forecast, Greece’s real GDP is expected to have declined by 10% in 2020. Together with a burgeoning public debt, Greece faces an extremely dangerous fiscal situation which puts its previous recovery at risk.

Brussels, Belgium: 11 February 2021

According to the European Commission’s forecast, containment measures are expected to weight on Greece’s recovery, with real GDP expected to grow by 3.5% in 2021, before rising to 5% in 2022.

In its Economic Forecast, the European Commission shares the following expectations for 2021:

  • It is expected the recovery will continue to be supported mainly by private consumption, on the back of gradual reopening of retail trade, improving consumer confidence and the supportive setting of fiscal policy in the economy.

  • Net exports are expected to contribute positively to growth in 2021 and 2022, with the rollout of vaccination campaigns expected to support only a gradual return of tourists to Greece.

  • Investment is forecast to recover as well but at a slower pace.

  • After dropping by 1.3% in 2020, HICP inflation is forecast to remain mildly negative in 2021 before turning positive in 2022.

The European Commission stresses the fact that the forecast remains subject to large uncertainty. According to it, the developments regarding the global health crisis and the vaccination rollout will be crucial for the recovery of the tourism sector and the speed of recovery in the private sector after the expiry of government support measures.

It deserves mention that in the first half of 2020, Greece announced measures equivalent to € 12.2 billion in support of COVID (Bruegel, November 2020). This amount increased with the second lockdown, in the fall of 2020.

We also note that General Government Debt in 2019 amounted to € 331 bln, whereas by December 2020 it had risen to € 374 bln. (Greek Public Debt Management Agency).

The fact that we can only see fragments of data at the present time belies the true magnitude of the crisis facing Greece.

In the table below, we have assimilated the European Commissions’ GDP forecast together with GDP and public debt estimates from the Greek Public Debt Management Agency.

As seen in these consolidated figures, nominal GDP has fallen to € 165.07 billion, while public debt has risen to € 374 billion. This is 227% of GDP: by far the highest in the Eurozone and the European Union.

This illustrates how much damage the COVID crisis has done to the Greek economy. Prior to 2020, the Greek recovery was gaining pace, driven by investment approvals and structure reforms made by the Mitsotakis government, as well as structural reforms forced upon the previous Tsipras government by the European Central Bank, the Eurozone and the IMF.

Today, that progress has been wiped out, and we anticipate the public deficit and public debt overhang will increase in 2021 and 2022. Once again, we anticipate that the size of the Greek public debt and the relative inefficiency of the Greek public sector will become the cause of unfavourable fiscal measures, and may form the root of the next crisis.

Navigator Consulting Group provides Investment Advisory and Strategic Management services for companies in Cyprus, Greece and internationally.

For further information, please contact:

Philip Ammerman

Managing Director


European Commission. February 2021

Bruegel. November 2020.

Greek Public Debt Management Agency. Undated.

Greek Public Debt Management Agency. 31.12.2020. 11 February 2021

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