People sit on the beach at Kokkari in front of a tavern on the island of Samos in the eastern Aegean, file photo. [AP]
The government is betting on tourism this summer for Greece to avoid the risk of a recession that other European countries are facing and therefore keep citizens’ incomes without having to dig deep into the public treasury for new support measures.
The focus is on the distance of more than 7 billion euros between last year’s tourism receipts of 11 billion euros and the record level of 18.2 billion euros in 2019; If Greece manages to cover that distance this year, the economy will have a satisfactory year, no matter what, with a growth rate of 3% in line with the country’s medium-term fiscal plan.
So far, the signs in this direction have been very positive: even if the number of arrivals is lower than in 2019, inflation and quality improvement may well bring revenues to the level of three years ago, according to economists.
This will send the national economy outperforming the Eurozone average as analysts see only Greece and Italy maintaining their tourism-led growth. However, they warn that a new shock in the fall, which cannot be ruled out, will make economic conditions very difficult as Greece is already on the brink. There is such uncertainty that no one can make any reliable forecasts as forecasts are constantly being revised.
Many banks and investment companies are now talking about a possible recession by the end of 2022 or in 2023, and the European Commission has added two unfavorable scenarios to its forecasts for the European economy. If this happens, Greece will also face the consequences, albeit with some delay: tourism will not resist forever, and if, for example, Germany enters a recession, German tourists will not visit Greece, leading to a new cycle of decline.
In addition to tourism, the government is pinning its hopes on the resources of the Recovery and Resilience Fund, which could well support the economy this year.
Finance Minister Christos Staikouras and his deputy Thodoros Skylakakis continue to reiterate that fiscal space has been exhausted for now, but leave a window of hope open in case there is some leeway that can be used to further support the economy.