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Greece is bouncing back from pandemic rout, says PM Mitsotakis

Greece is on track to produce a primary surplus from 2023, Prime Minister Kyriakos Mitsotakis said on Friday, saying the country’s economy had shown resilience to the COVID-19 pandemic.

In an interview with Reuters, Mitsotakis also said the country would likely exceed its forecast earnings from tourism this year, and expressed hope the country could return to investment grade ‘sooner rather than later’.

“I feel comfortable that our public finances are fully sustainable,” said Mitsotakis, whose New Democracy conservatives came to power in July 2019.

Greece, which saw a quarter of its national output sapped by almost a decade of financial turmoil starting in 2010, had emerged from recession in 2017.

But the pandemic took its toll on the country’s economy in 2020, when lockdowns and a downturn in tourism – a key money maker – sent the economy into a tailspin, shaving 8.2% from output and tipping public finances into a deficit.

Just 7 million people visited the country last year, bringing in revenues of 4 billion euros ($4.69 billion) compared with a record 33 million tourists and revenues of 18 billion euros in 2019.

Now, Mitsotakis said, Greece appeared to be on course to exceed 50 percent of 2019 visitor revenues, a factor which prompted an upwards revision of 2021 growth targets last week.

“Obviously we’ll do the math at the end of the tourism season. But the first indications that we have is that we will be able to exceed the target that we have set in the budget. That is also one of the reasons why we have updated our growth forecasts for 2021,” Mitsotakis said, referring to an updated 5.9% growth outlook from an initial 3.6%.

“Overall, we were very clear in terms of communicating our messages that Greece is open for tourism.”

Mitsotakis also said Greece was rapidly turning into an attractive destination for foreign investment beyond traditional sectors like tourism and leisure.

The country signed up for three bailouts worth more than 280 billion euros from 2010 onwards in exchange for reforms, and its economic performance is still closely monitored by lenders.

Finance Ministry officials estimated this month that Greece may return to an investment-grade bond rating at the end of next year or at the beginning of 2023.
Source: Reuters (Reporting by Lefteris Papadimas and Deborah Kyvrikosaios; editing by Jonathan Oatis)

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