Cash crunch results in significant reduction of imports

Imports posted a decline for a second consecutive month in February, sliding 14.6 percent compared to the same month in 2014. When fuel products are excluded, the yearly decline amounts to 6.7 percent, according to data released on Tuesday by the Hellenic Statistical Authority (ELSTAT).

The reason for the drop does not point to any increase in the economy’s self-sufficiency. Rather, as exporters announced on Tuesday, it is mainly due to the lack of liquidity available to Greek enterprises and the pressure on them from foreign suppliers.

A key component in this drop is the remarkable decrease in fuel product imports, which is connected to the decline in production activity and the return to economic contraction after a year of relative growth in 2014. There was also a fall in ship imports.

ELSTAT announced that the total value of imports in February amounted to 3.44 billion euros, against 4.04 billion in February 2014. Imports had contracted by 16 percent year-on-year in January, reaching 2.14 billion against 3.74 billion euros a year earlier. Therefore, in the first couple of months of the year there was a total contraction of 15.3 percent in revenues, or 11 percent excluding fuel products.

Notably, the biggest drop concerned imports from third countries and not from the European Union. Third-country imports declined 31.2 percent, while imports from within the EU fell by just 6.7 percent. This suggests that EU imports could constitute a safety cushion for Greece.