From January-May 2020, Greece's current account had already deteriorated by 700 MEUR over the same period in the previous year (minus 5,6 BEUR vs. minus 4,9 BEUR). However, the critical period is from June-September. During those 4 months, the annual result in the current account is either made or broken because during this period the capital inflows from tourism take place. Last year, those 4 months registered an accumulated surplus of 4,9 BEUR in the current account.
Owing to the Corona-driven collapse in tourism, a very significant drop in capital inflows can be expected. In a worst-case scenario, there may not even be a positive contribution to the current account during this period.
The good news is that in the current environment, Greece does not have to worry about obtaining foreign funding. The bad news would be that the foreign funding is used to finance current account deficits instead of other more productive purposes.
