Shipping boom could boost GDP by 0.6 pct

A projected boom in the oceangoing shipping sector this year, deriving from above-average freight charges, is set to give the economy a substantial boost while at the same time help make up for lower tourism receipts, the National Bank said. In its February-March economic report released yesterday, the bank said, «The positive spillover on the Greek economy from a resurgent shipping sector will be sizable, as the Greek-owned fleet is the largest in the world and a significant share of its revenues pass through the Greek economy.» The shipping sector, not including the domestic ferry sector, generates more than 2.5 percent of Greece’s gross domestic product and accounts for 1.5 percent of total employment. When related activities such as brokerage, supplies and repairs are included, the impact is even more significant. Growth this year is expected to come from above-20 percent increases in freight charges. While the rates are significantly lower than the peaks reached near the end of 2002, they are still expected to go up by 21 percent and 28 percent for dry cargo and tankers from the previous year, Christos Dantamis, author of the report, said. Dry cargo and tanker volumes are forecast to grow 2.5 percent and 1.9 percent respectively. Dantamis said the shipping boom would have a positive impact on Greece’s current account balance and economic growth. Higher freight charges and freight volumes could lift sea transportation revenues by 16.5 percent, or 660 million euros, this year, alleviating Greece’s current account deficit, which surged to 6.5 percent of GDP in 2002, he suggested. The buoyant shipping sector could also pick up the slack in the tourism industry, where bookings have fallen by 10-20 percent in the first four months of the year as travelers put off their holidays because of the war in Iraq. Dantamis said robust growth in shipping «could offset a decrease in tourism receipts of up to 6 percent.» Either directly or indirectly, the sector could contribute some 0.6 of a percentage point to this year’s GDP, he said.