According to our projections, instead of “scarring” or “hysteresis” (which is fancy terminology employed by economists to say that a specific event, such as the COVID-19 pandemic, will have a long-lasting negative economic impact), Greece is entering a “Goldilocks” regime. Starting from extremely low levels of activity with extensive spare capacity and taking into account the newly established fiscal relaxation, abundance of liquidity, low funding cost and unprecedented levels of EU funding, Greece is in a position to not only recover pandemic-related lost output but also transition to a higher trajectory of economic growth relative to our pre-COVID-19 projections.
Real GDP: Final Estimate vs Pre - Covid forecasts (€ bn)
GDP will exceed its pre-COVID trajectory by 2025
Source: ELSTAT, Piraeus Bank Research