The challenge of post-pandemic economic recovery

By Nikos S. Magginas *

After an exceptionally difficult year that was marked by the painful experience of the pandemic and the resulting enormous loss of life, one understandably harbours anxieties, expectations, and hopes for 2021.

Unavoidably, the public health crisis and its negativε repercussions on the economy will continue at least through the first months of 2021 as it will take many months until one achieves the requisite immunity level in the population to get beyond the need to enforce strict restrictive measures. Nevertheless, the rolling out of vaccinations in a number of countries lays the groundwork for reducing the uncertainty.

It is encouraging that despite the fact that the pandemic is in full swing the economy exhibited some positive signs with the help of fiscal support measures. Economic activity in the third quarter of 2020 may be stronger than what the official data on GDP indicate.

Although the last quarter of 2020 was and the first quarter of 2021 will likely be exceptionally difficult, I believe that suitable preconditions for keeping the economy on a sustainable track of recovery in 2021 are emerging.

Let us outline the most important ones.

Despite the unfortunate timing of the pandemic - which halted the recovery of the Greek economy in its early stages - the durability and adaptability of healthy economic units produce healthy antibodies.

Most healthy Greek businesses were exceptionally cautious about their investment moves in the last years, making a shift away from leveraging and toward strengthening their presence in the domestic and international market a priority.

This careful stance increased their endurance in the ongoing crisis, especially if one takse into consideration state aid...