GDP to lose 3 years of growth

Next year Greece will revert to the economic output of 2017, losing the additional wealth it painfully built over the last three years, while this year it will see its economy shrink by 8.5%, leading consultancy Grant Thornton projects in a report.

The company’s analysis shows that 69% of the country’s enterprises have been hurt by the pandemic this year, a sum of companies that last year accounted for an estimated turnover of 287 billion euros.

For 2020 the companies in the sectors Grant Thornton examines – a sample of 17,000 entities with an annual turnover of at least €200,000 each – are expected to post losses of 12.4% in their turnover and 39% in their operating profits. Their cash flow is projected to shrink by €5.6 billion euros throughout this year.

The report found that seven crucial sectors of the Greek economy were affected by the pandemic, which restricted business activity. They were transport and logistics, the accommodation and food service sector (affected by almost 100% by the lockdown), wholesale commerce, manufacturing, retail commerce, energy, and information-communication. There is also a group of smaller sectors with a total annual turnover of €10 billion, such as education and entertainment, which the coronavirus measures affected by 85%.

In total, the impact on the revenues of all of the above sectors is expected to come to €200 billion, using the 2019 data as yardstick. A significant share of that comes from the companies that suspended their operations: They account for 11% of the total turnover of the productive sectors, or €32.9 billion, and employ about 1.1 million workers. The bulk of those companies are enterprises active in the sectors of food service and accommodation, education and entertainment, which between them employ 845,500 workers.

According to the Grant Thornton report, the more turnover grows, the greater the impact on gross domestic product in food service, sea and transport, and accommodation. The consultancy’s analysts explain that food service and accommodation have a far greater multiplying effect on the Greek GDP than retail, pharmaceuticals and telecommunications.

The Grant Thornton report has found that seven crucial sectors of the Greek economy were affected by the pandemic, which restricted business activity. They included the accommodation and food service sectors, which were affected by almost 100% by the lockdown this spring.