Greek exports feel the pinch from crisis in Ukraine

By Dimitra Manifava

Greek exports declined for a fifth consecutive month in February, data by the Hellenic Statistical Authority (ELSTAT) have shown, creating serious concerns about the sustainability of production in the country’s primary and secondary sectors.

The decline is likely to continue in the next few months as Greek exports are already feeling the impact of recent developments in Russia and Ukraine. At the same time, imports are growing, which may be a sign of economic recovery, but combined with the drop in exports means containment of the decline of the external trade deficit.

ELSTAT figures showed on Monday that the value of exports in February amounted to 2.05 billion euros, compared with 2.20 billion in February 2013, i.e. a reduction of 7 percent. When oil products are excluded the decline amounts to 5.6 percent. The total value of exports on a 12-month basis, from March 2013 to February 2014, posted a 2.8 percent decline from the same period a year earlier.

Although in February exports to European Union state expanded by 0.4 percent year-on-year, this was dwarfed by the decline of 12.4 percent in exports to third countries, mostly due to the drop in oil product exports – excluding them, exports fell 7.4 percent to other EU countries and 2.1 percent to third countries.

According to the Panhellenic Exporters’ Association (PSE), the coming weeks will show the full extent of the impact that the Russian-Ukrainian crisis will have on the country’s exports, as well as the consequence of the euro-dollar exchange rate as far as exports to third countries are concerned.

Besides the rejection by Russian authorities of Greek strawberry loads a few days ago, exporters also face an increase in forwarding costs as they have to send their cargo to Russia via Belarus, meaning deliveries take five days instead of three-and-a-half.

Imports posted growth for the first time since September, despite the significant decline in oil product imports. Year-on-year growth amounted to 1.6 percent, and excluding oil products the rise came to 16.4 percent. This was mostly due to the increase in imports of mechanical equipment and vehicles from third countries.