Climate crisis deals blow to exports
The climate crisis will cost Greek goods exports one percentage point of their growth rate in the year 2023, a significant amount for a country that has been struggling for years to reduce its trade deficit, according to a National Bank of Greece study.
The above translates into a mere 1% increase in Greek exports in 2023 compared to 2022. It is also worth noting that the losses brought about by the Thessaly floods comes to a quarter of annual growth.
The impact of the climate crisis is expected to be even more pronounced in 2024, as in combination with the geopolitical instability in the region – but also the inflationary crisis which has led to a decline in demand – it is estimated that it will remove two percentage points from their medium-term annual growth trend, which is 5%, and that exports will increase next year by 3%.
The first effects were already visible, as NBG points out, during the summer, with exports of goods moving downward for the first time after the pandemic – even before the arrival of Storm Daniel, which affected a significant part of agricultural and livestock production.
The fact that, on the other hand, exports of high-tech products are holding up may well also provide one of the long-term solutions for limiting the consequences of the climate crisis on export trade: the shift to high-tech industrial products, but also the transition to whatever also concerns agriculture in cultivation methods that limit exposure to extreme weather phenomena, such as hydroponic crops.
Therefore, according to the NBG analysis, exports in the June-August 2023 quarter fell by 1% if one does not take inflation into account, and by 2.7% in nominal terms. The high-tech sectors (machinery and pharmaceuticals) continued their upward trajectory, firmly supporting Greek exports and recording an increase compared to the corresponding quarter last year by 10% and 9% respectively, even gaining shares against European competitors.
Food exports increased by 3%, the contribution being reduced by a decline in olive oil exports. There was a 10% drop in the metals sector, mainly due to copper and iron, while clothing sector exports recorded the largest percentage drop (-40%).
