Greece’s economy will contract this year because of the coronavirus lockdown, the country’s finance minister said on Tuesday, but the projected recession will be temporary.
It was a rapid re-estimation as the minister had projected eight days ago that the economy would weather the coronavirus storm and “grow just a little over 0%”.
“The situation in Greece’s economy has deteriorated and continues to deteriorate,” Christos Staikouras said in a televised address. “The crisis is deep, it will become deeper and the economy will turn into recession in 2020.”
Greece, which exited its latest bailout in 2018 and was recovering after a multi-year downturn, had been projecting that its economic output would increase by 2.8%.
Staikouras said the downturn will be temporary but the damage to the economy in the short term would be significant.
Prime minister Kyriakos Mitsotakis said last week the government would inject 10 billion euros to support the economy through tough times due to the coronavirus outbreak.
Greece’s central bank slashed growth projections for the economy to 0% from a previously estimated 2.4% this year due to the impact of the coronavirus epidemic.