IMF: Greek economy to contract 10 pct in 2020

The Greek economy is expected to record a recession of 10 percent in the current year, as a result of the macroeconomic shocks caused by the coronavirus pandemic, the International Monetary Funf (IMF) said in a report on Tuesday.

The recession will be followed by a 5.1 percent growth in 2021, the IMF said in its latest World Economic Outlook report which was presented by Gita Gopinath, the IMF’s chief economist.

Gopinath said he baseline scenario adopted by the IMF is that the pandemic will weaken towards the end of this year, noting that there is still great uncertainty about the development of the pandemic.

Regarding unemployment, the IMF estimates that it will rise to 22.3 percent in Greece in 2020, while for 2021 it estimates that it will hover around 19 percent.

The current account deficit will reach 6.5 percent of GDP by 2020, while in 2021 it will fall to 3.4 percent.

In addition, Greece will be led to deflation (-0.5 pct) in 2020. However, next year inflation will increase by 1 percent on average.