Estimates insist on economic rebound
The Delta strain of the novel coronavirus may have raised concerns across Europe about the prospects of an economic rebound after the lockdowns, but international firms remain optimistic that it will not derail the Greek economy’s strong recovery. As a result, they are not downgrading their positive estimates of gross domestic product growth. If anything, they are revising their projections upwards on the strength of the very good course of the first quarter.
Although Fitch stressed that the main risk for Greece right now is Delta, in its recent report on the country it upgraded its growth projection for this year from 3% to 4.3%, thanks to robust Q1 performance.
A few days ago, Citi also raised its expectations of the Greek economy, now projecting a 5.3% expansion in 2021 from 4.1% just a month earlier. It explained that this was meant to incorporate the very positive course of tourism it anticipates in the second half of the year in spite of the Delta concerns.
Capital Economics moved along the same lines, as it now anticipates the Greek economy to grow at a rate of 8% this year, even though the tourism season will be relatively weak.
Scope Ratings, for its part, said that despite Delta’s threat to tourism, Greece is heading a robust expansion this year, amounting to 6.5%, thanks to the very positive course of the economy already from the first and second quarters.
Bank of America is also sending a positive message to traders and investors about Greece, maintaining in a report on Friday its projection for 5.1% economic growth this year.
It did note that the Delta variant remains a concern, but argued that the data from European Union hotspots such as Greece, Cyprus, Portugal, Spain etc, allow optimism that the mild restrictions imposed combined with the vaccinations will suffice to flatten the curve of Covid-19 cases.
This does not mean those areas are out of risk, BoA cautioned, as there are some provisional signs that the spread is peaking and this appears to be due to younger age groups. However, the mild restrictions appear able to contain the spread, which would be good news for the economic recovery of these countries, said BoA.
