IMF: Coronavirus Lands Record Blow to Greek Tourism, Economy



The headquarters of the International Monetary Fund in Washington, D.C. File Photo

The dramatic reduction in tourist revenues in Greece caused by the coronavirus pandemic will have a deeply negative impact on current account balances, amounting to a loss of up to six percent of the nation’s GDP, the International Monetary Fund says in a report published on Thursday.

In its annual External Sector Report, the IMF estimates that Greece will suffer the second-largest negative impact in the world in its current budget, after only the nation of Thailand. In April the Fund had predicted that Greece would face the largest recession in the eurozone due to the pandemic.

The Fund pointed out the large decline in key tourism indicators (hotel bookings, international travel, and tourist arrivals), noting that there are several world economies with a high degree of dependence on tourism revenues, which this year will have a negative impact on current account balances of greater than 2% of their GDP.

The Greek economy’s large degree of dependence on tourism revenues gives it second place in the IMF rankings which show the expected adverse effects on a nation’s finances, with the final blow being estimated at almost six percent of GDP for this year.

In its report on the external sectors of the economies, the IMF underscores that in 2019 the imbalances — i.e., current account surpluses/deficits — were reduced, but the outlook for 2020 remains highly uncertain.

The pandemic has caused a large drop in international business transactions, and has reduced commodity prices, so therefore it is much more difficult to obtain external financing.