Greek economy heading for zero growth in 2020 due to coronavirus: central bank

Source: Xinhua| 2020-03-20 22:35:51|Editor: Mu Xuequan
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ATHENS, March 20 (Xinhua) -- The Greek economy is heading to zero growth for 2020, Bank of Greece Governor Yannis Stournaras said in a report on Friday, in the wake of the measures rolled out to contain the spread of the novel coronavirus.

This compares with the previous estimate by the central bank for a 2.4-percent economic expansion, made before the coronavirus outbreak, according to an e-mailed press announcement by the bank.

The Greek government has temporarily shut down hundreds of thousands of enterprises and restricted transport, in an effort to reduce the contagion of COVID-19, the disease caused by the coronavirus, in the community.

In his report for the 2019 financial year to the central bank's stakeholders, Stournaras noted that last year "the Greek economy sustained its growth momentum and recorded a growth rate of 1.9 percent despite the anemic expansion of the European economy."

He added that "in an international environment of negative yields, the yields of Greek sovereign and corporate bonds recorded a constant and rapid decline which has just recently been reversed owing to the expansion of the coronavirus."

The central banker stressed that "the decision by the European Central Bank on March 18 to apply a waiver from the general bond eligibility rule on Greek sovereign bonds with the new bond buying program associated with the pandemic, is exceptionally significant."

Stournaras estimated that this year's growth rate "will be significantly slowed down given the consequences from the expansion of the coronavirus. These consequences cannot be precisely quantified for the time being, given that there are no data available yet and the pandemic is unfolding."

The report then pointed out that "according to the baseline scenario of the Bank of Greece, the change rate of the gross domestic product will be zero in 2020." It explained that "based on the latest data on the evolution of the pandemic, the most likely version is for a considerably negative impact on the economy in the first two quarters of 2020 that will be partially offset in the latter two quarters."

It also warned that "no one can predict with precision today the evolution of the pandemic, while its effects on the national economies will also depend on the national and international fiscal and monetary measures taken."