The Greek economy recovered vigorously from the pandemic, driven by strong domestic demand and tourism, the European Stability Mechanism (ESM) said in its annual report for 2021 approved in Luxembourg on Thursday, ANA reports.
Greece’s economic activity rose by 8.3% in 2021, ESM noted, “essentially recovering the output losses recorded in the previous year due to the impact of Covid-19,” as households and firms used accumulated savings to boost consumption and investment, and tourism surged. The government’s large fiscal support package propped up incomes and employment throughout the year, it said.
Thanks to rapid growth, the debt-to-GDP ratio dropped to 193.3% of GDP from 206.3%, while “Greece’s sovereign financing conditions remained favorable throughout the year,” noted the report, while banks more than halved their aggregate NPL ratio to 12.8% by the end of 2021. “Yet the overhang of private debt remains, underscoring the need for an efficient enforcement framework,” the report warned.
Speaking of the overall economic reforms, the ESM report said, “Greece reached several important milestones in its comprehensive reform agenda: the implementation of a new insolvency framework; further progress in privatization, notably of land at Athens’ former airport; and the adoption of an ambitious strategic plan to strengthen governance in state-owned enterprises and improve financial discipline.” It also made note of some setbacks in reform efforts, citing for an example the plan to reduce non-pension arrears to zero in 2021.
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