Capital controls inflicted a heavy blow on imports and exports in July, the first month of their imposition, which points to a further reduction in industrial output and exports in the coming months.
According to the Panhellenic Exporters Association and its Exporting Research Center, based on data from the Hellenic Statistical Authority (ELSTAT), the total value of exports in July dropped to 2.3 billion euros from 2.5 billion euros in July 2014, a decline of 8 percent. There was also a dramatic contraction in imports, which fell to 3.02 billion euros from 4.5 billion euros a year earlier, or 32 percent.
The picture is better when one excludes fuel products, with the drop in imports contained to 22.6 percent and exports showing an increase of 7 percent.
However, the overall picture is worse than what the association had originally anticipated: Based on the example of Cyprus when capital controls were introduced in that country in 2013, it had expected that Greece would see a drop of 7 percent in exports and 28 percent in imports.
The analysis showed that July’s drop in exports mostly concerned orders coming from non-European Union countries (down by 27.2 percent year-on-year), while total exports to EU states increased by 11.1 percent. The July figures had a significant impact on the sum of the first seven months of the year, with the total value of exports declining by 2.7 percent or 430 million euros on an annual basis.
Imports fell 10.1 percent to 25.3 billion euros in the year to end-July, compared with 28.14 billion in 2014. The decline in both exports and imports saw the trade deficit shrink in the year’s first seven months by 19.5 percent from 2014 to 9.9 billion euros against 12.4 billion in January-July last year.
Three sectors bore the brunt of the decline in exports in July, with fuel products shrinking 28.2 percent, tobacco and alcoholic beverages dropping 9.3 percent and raw materials falling 5 percent, on an annual basis. All other sectors continued to post growth, with olive oil remaining the leader, advancing by 83.7 percent year-on-year.