Greece, exports falling for the second year in a row - High dependence on imports widens trade deficit
Greek exports are forecast to decline for the second consecutive year in 2024, also reflecting a widening trade deficit.
Even if a significant part of the decline in the value of Greek exports in 2024 was due to the fall in oil prices, the trade deficit problem is not cyclical. In addition to exceptional factors, it is due to the strong dependence of many exports on specific European Union countries and, above all, to Greece's strong dependence on imports.
This confirms that the growth in Gross Domestic Product is mainly due to the increase in private consumption, which accounts for 70% of GDP), but also calls into question the policies implemented that strengthen imports and not domestically produced products. An example is the subsidies for the purchase of cars, then for refrigerators and air conditioners, and only recently for the installation of solar water heaters, which are produced in Greece.
Despite the clear improvement in the export orientation of the Greek economy, which began during the economic crisis, the country suffers from a significant dependence on imports. According to the 2024 annual report of the National Productivity Council, in 2008, just before the start of the financial crisis, the goods balance index was 0.35, meaning that exports accounted for only 35% of imports, compared to 1.02 in the eurozone. Fifteen years later, the goods balance index in Greece has improved significantly, but remains quite low (0.60 in 2023).
The signs are not good for 2025, as the imposition of further trade protectionist measures, as warned by US President-elect Donald Trump, is expected to hit Greek exports as well.
Developments in Germany and France have already affected Greek trade. In the period January-November 2024, the value of exports to EU member states fell by 6.6%, including petroleum products.
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