Capital controls take toll on exports
Greek exports suffered a huge blow from the economic turmoil this summer, as their value declined 8.55 percent in the third quarter of the year on an annual basis, according to data released by the Panhellenic Exporters’ Association.
The Greek economy suffered a triple shock from late June due to the capital controls, the three-week bank holiday and the political uncertainty, leading also to a major fall in imports, although this did not lead to a fall in the economy’s dependence on imports. It merely reflected the restraints on imports due to the difficulty in paying for them.
The exporters’ data showed that in the first nine months of the year the total value of exports shrank 4.6 percent on a yearly basis, amounting to 19 billion euros, against 19.92 billion euros last year. In the first half of the year, before the government imposed the capital controls, exports had also posted a decline, but at a smaller rate, of 2.2 percent year-on-year.
In the third quarter alone exports amounted to 6.21 billion euros, against 6.79 billion in the July-September 2014 period.
The capital controls also affected the flow of revenues from the sales of Greek exports in foreign markets. The percentage of revenues from exports compared to the total value of exported goods dropped to 97.63 percent in the first nine months of the year from 99.95 percent in the same period in 2014. This delay in the payment of Greek exporters is largely due to foreign buyers feeling that they could delay payments due to their privileged position, as well as to delays in the clearance of payments as a result of the capital controls.
The decline in global oil rates has played a significant role in the drop in the value of Greek exports, as Greece imports crude oil but exports significant quantities of products deriving from its processing. This has resulted in major shifts in top Greek export destinations. Turkey has now dropped from first to third place, with Italy now the No 1 destination for Greek exports and Germany in second place. Cyprus and Bulgaria are also in the top five, while the US climbed from 10th to sixth spot, the exporters’ association announced.