Greece's vital tourism industry is holding up in "satisfactory fashion" against fears of serious losses due to the global economic downturn, according to the Greek tourism minister.

"Despite the economic situation things are proceeding in satisfactory fashion... the disaster scenarios fortunately have not been fulfilled," Tourism Minister Costas Markopoulos said after briefing Prime Minister Costas Karamanlis.

Economic slowdown and job losses in the US, Britain and Germany, which generate the bulk of Greece's tourism income, had alarmed local operators with one prominent association warning in April that the industry stood to lose €5 billion this year and thousands of jobs.

At the time, the association of Greek tourism enterprises (SETE) said early bookings indicated a 20 per cent drop in arrivals and cruise ship demand.

Mr Markopoulos said the latest figures pointed to a drop "between one and two digits".

The Bank of Greece recently reported that tourism proceeds in the first five months of the year fell 17.9 per cent - or €1.7 billion - compared to the same period last year.

The country's main source of income after shipping, tourism makes up 18 per cent of the Greek economy and employs over 850,000 people directly or indirectly, according to the tourism ministry.