The European Commission revised its forecasts for Greek economic growth on Wednesday, projecting growth rates of 4.1% in 2021 and 6.0% in 2022.
The EU's executive body, in a report in its spring economic forecasts, said that the COVID-19 pandemic and all related restrictive measures led the Greek economy to a deep recession in 2020 (-8.2%), "with tourism and the services sector particularly hit."
"However, the timely implementation of support measures managed to moderate the extend of the economic contraction, supporting employment and liquidity of enterprises," the forecast report said.
"A supportive fiscal policy, combined with a strong boost expected from the recovery and resilience plan, are expected to contribute in the restart of the economy," the Commission said.
The support measures managed to avert large-scale layoffs of workers, keeping unemployment at 16.3% of the workforce, while employment fell because of lower hiring's in the tourism sector, but could not achieve growth.
The report noted that progress in a vaccination drive in Greece will allow a gradual easing of restrictive measures, contributing to higher private consumption, particularly in 2022 and help growth in the economy.
It is expected that in the second half of 2021, an increase in investments is expected due to the start of projects in the framework of the national recovery plan.
The unemployment rate is projected to remain at 16.3% of the workforce this year and to ease slightly to 16.1% in 2022, while the inflation rate is expected to remain slightly negative this year and to recover in 2022.
The country's fiscal deficit is projected to rise to 10% of GDP this year, from 9.7% in 2020, but the nominal deficit is projected to drop to 3.2% of GDP in 2022.
Greece's public debt is expected to rise to 209% of GDP this year and to ease to 202% of GDP in 2022.