Greece: The rise in the tourism sector will bring growth in the third quarter of 2021

The pandemic is not over but epidemiologists predict that by inoculating a large percentage of the population it will be manageable. The vaccination program is progressing well, allowing restrictive measures against the pandemic to be lifted and allows the opening of Greek tourism. Foundation of economic and industrial research predicted that tourism will move to 40-45% of the levels of 2019. This will boost the economy, reduce unemployment and will increase GDP by 2%. 

Generally, in the field of economics, the European Commission has published the economic analysis for the summer of 2021 with a forecast for growth in all Member States. Inflation, on the other hand, has risen since the beginning of the year and has created a wave of price increases on all products, with the direct burden on the consumer. Τhe report of the European Commission predicts that it will continue to fluctuate throughout 2021. 

The recovery from the pandemic is at the heart of the EU with the funding program NextGenerationEU significantly strengthening states. Greece in particular will receive 31.16 billion, of which 18.43 billion in grants and 12.73 billion in loans. The agreement signed in Brussels includes the Greece 2.0 financing plan, which is based on four pillars. These pillars concern reforms in the following areas (1) Green energy and development, (2) Digital, (3) Employment, skills and social cohesion (health, education, social protection), (4) Private investment and economic and institutional transformation. Direct investment projects that will be financed by the program are: the highway of central Greece, modernization of the railway network, undergrounding of the electricity grid and connecting islands to reduce energy costs, regeneration of the beaches of three major cities, fiber optic network expansion and 5G network on highways for autonomous driving in the future. 

Another investment that will change the image of Athens is the development of the old airport in the area of Elliniko. The project will exceed 1 billion euros and will include the construction of the largest seaside park in the world. They have already started selling homes and renting out stores from companies that want to build large shopping malls. Investing in an area that has remained unused for years indicates to foreign investors that the climate has changed and Greece is attractive for new investments. 

There were also changes in the area of taxation. The government is trying with steady small cuts in rates to relieve business from the pandemic crisis and restart the economy. In the corporate income tax reduces the rate from 24% to 22% for 2021. Also, the advance payment of income tax of legal entities is reduced from 100% to 80% and natural persons engaged in business is reduced from 100% to 55%. Another measure voted by the government is the abolition of the solidarity levy paid by private sector employees. 

Vaccination, EU funding, investment in infrastructure and reforms are the useful tools that Greece must use to return the economy to steady growth.

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