The OECD sees a deep recession of up to 9.8% for Greece. Due to the “unusual degree of uncertainty”, the OECD uses two scenarios for all countries and economies, which it considers equally likely.
In the first scenario, in which there will be no further escalation of the coronavirus pandemic, the Greek GDP is projected to decrease by 8% this year compared to 9.1% in the Eurozone, and grow by 4.5% in 2021 compared to 6.5% in the Eurozone. In the second scenario, which includes a new outbreak of COVID-19 in all countries around the end of 2020, the Greek economy is estimated to record a 9.8% contraction this year compared to 11.5% in the Eurozone and to grow by 2,3% in 2021 compared to 3.5% in the Eurozone.
Regarding the global economy, the OECD forecasts a 6% decline this year and a growth of 5.2% in 2021 in the first scenario, while in the second scenario it predicts a decline of 7.6% and a growth of 2.8%, respectively. But even in the first scenario, many developed economies will have lost the increase they have been recording in their per capita income for five years, he said.
Combined with the declining GDP, public debt ratio (based on the Maastricht definition) is projected to go up by 196.9% of GDP this year (to 209.3% according to the second scenario) from 176.5% in 2019, before falling to 190.7% in 2021 (204.7% in the second scenario). The unemployment rate is projected to rise to 19.4% (19.6% in the second scenario) this year and to 19.8% (20.4% in the second scenario) in 2021.
Reduced economic activity and revenue will reduce tax and social security contribution payments, leading to a primary budget deficit from a significant primary surplus, according to the OECD, which predicts that the overall budget deficit will reach 7.7% of GDP this year (8.8% according to the second scenario) and 4.9% in 2021 (6.6% with the second scenario) from a surplus of 1.5% last year. /ibna