ECONOMY

Two different tales in key sectors

With Greece in the midst of a severe recession, two of the country’s most crucial sectors, shipping and tourism, are telling two different stories. Data from Bank of Greece (BoG) released yesterday showed that the global environment had a different impact on the two industries in the first half of the year, creating opposing outlooks for the remainder of 2010. Greek shipowners, who possess about 20 percent of the world’s fleet, raised 7.7 billion euros in income between January and June, up from 6.7 billion in the first half of 2009. The figure stood at 9.4 billion midway through 2008. «We have covered half of the ground lost last year,» Yiannis Cotzias, the CEO of shipbroker Cotzias, told Kathimerini English Edition. Solid demand from China is helping support freight rates, while improved investor sentiment has increased risk appetite in a sector that is starting to see more finance available for operations. «Credit has started to flow. There is heavy scrutiny but the banks are offering credit, in conditions similiar to those seen in the 1970s and 80s,» Cotzias said. Greek shippers got a further boost recently from Russia’s decision to ban grain exports. Grain products will have to be transported from markets other than the Baltic region, such as South America, creating more demand for sea transport services, according to a shipping industry source. Risks, however, linger in the form of a potential oversupply of ships and market volatility, after recent figures on the US and Chinese economies suggest global growth is facing headwinds. Data in Greece’s other key industry, tourism, has painted a very different picture. BoG numbers showed that spending on travel by nonresidents dropped in the first half of the year to 2.7 billion euros, from 3.1 billion in the same period last year. Experts believe that the number of visitors to reach Greek shores this year will remain at last year’s levels, at nearly 15 million people. However, the money these individuals spend will be less due to the special deals used to attract visitors and the fact that travelers are spending less due to the downturn. Deputy Tourism Minister Giorgos Nikitiadis admitted to Kathimerini recently that tourism revenues will be between 7 and 9 percent lower than in 2009 and attributed the drop-off to continued strike action harming the country’s image as a holiday destination. This means that sector revenues could be up to 1 billion euros less than last year, when they reached 10.3 billion euros for the 12-month period, down from 11.6 billion euros in 2008. [email protected]