For the Greek economy, the 2020 recession approaches the levels of the first years of adjustment programs. Many companies face the possibility of shutdown or lower revenues and profitability. The labor market, although supported by government measures to strengthen the economy is under great pressure with the income of workers employed in suspended companies being severely affected. Respectively, the fiscal conditions deteriorated and from a primary surplus in the government budget in 2019 a significant deficit has been created. Therefore, the public and private debt will increase. The banking sector faces significant challenges, due to the high percentage of non performing loans that may increase due to the contraction of the economic activity.
As the Greek economy is more dependent on inbound tourism than any other European economy, the potential for strong recovery is limited as the COVID-19 health crisis persist. It is indicative that in 2019 about 34 million tourists visited Greece with travel receipts amounting to €18 billion. In 2020, the total arrivals and revenues were lower than those recorded in the third quarter of 2019. The effects of the pandemic are expected to affect tourism demand in 2021 with the optimistic scenario estimating tourism demand reaching half the 2019 levels. These recent developments have significant social implications, increasing the risk of widening socio-economic inequalities which have intensified due to the economic crisis over the past decade.
It is expected that the Greek economy will grow after the gradual abolition of health measures and the return to normal conditions. The metropolitan centers of the country, including Piraeus, will play an important role due to their infrastructure and for hosting companies with high added value products and services. These companies can attract investments and quickly adopt new technologies.