Economy set to shrink 1-3 pct, says Staikouras

Finance Minister Christos Staikouras has for the first time spoken specifically of a recession for the Greek economy this year, as on Thursday on Skai TV he estimated a contraction of 1 to 3 percent, without ruling out an even worse scenario if the pandemic lasts beyond June or returns in the fall.

The minister explained that there are three unknown factors at this stage: how long the forced measures last, what the effects will be on tourism and whether the phenomenon recurs this fall.

Staikouras called on banks to help Greek corporations and promised that the new measures to come in April will concern almost all enterprises in the country, as there are only a few companies that are not suffering due to the impact of the new coronavirus.

In the first 10 days of April, the list of those hurt by the pandemic and benefiting from state support is expected to include an estimated 90 percent of enterprises in Greece. This means the number of workers who receive the 800-euro benefit is set to rise to about 2 million. At the same time, their payments of taxes and social security contributions will freeze.

Finance Ministry data show that, at the moment, 600,000 enterprises are suffering as a result of the crisis and being supported by the state, while next month they will be joined by another 300,000. According to Staikouras, the fiscal cost for March and April will amount to more than 4.7 billion euros.

The state budget is already showing the first problems, per the data released on Thursday by the State General Accounting Office. The primary surplus in January and February came to 831 million euros, down from a target of 929 million euros. Net budget revenues amounted to 7.56 billion euros, 468 million euros or 5.8 percent below the target, primarily due to the 342-million-euro drop in revenues from the Public Investments Program.

Budget spending in the year to end-February was 175 million euros below target, at 8.66 billion euros.