Yannis Stournaras, Governor of the Central Bank of Greece (ΤτΕ) said on Saturday that the Greek economy could contract by 9.4%, based on the worst-case scenario if the second wave of the epidemic deepens..
ΤτΕ expected the economy to contract by 7.5% this year under a baseline scenario, worse than previous expectations for a 5.8% drop in gross domestic product (GDP).
"The pandemic's second wave, as well as restrictive measures in the fourth quarter of this year, may bring the economy closer to the worst-case scenario in 2020, and a weaker recovery in 2021," Stournaras pointed out.
Stornaras added that under this scenario, additional fiscal policies are essential without risking financial stability.
"A combination of a large fiscal deficit, high public debt, and a slow recovery leads to a higher debt, sustainability risks, and negative implications for long-term growth," the governor stressed.
The Greek economy contracted at an annual rate of 0.5% in Q1 of 2020 and by 15.2% in Q2 due to the pandemic.
Greece has seen a steady rise in COVID-19 cases since August, however, it is still in a better position, yet fragile, than other European countries.
The country has reported 508 new confirmed cases on Friday, and health officials are worried that lower temperatures in the winter could intensify the pandemic trend.
Follow the latest news on Google News
