Alarm bells over trade deficit
The trade deficit is showing an alarming trend upwards, with negative consequences on Greece’s external debt and gross domestic product.
The strengthening of consumer demand may have given a push to the economy, as reflected in the recent GDP data for the second quarter, but confirms doubts regarding the depth and the scope of that growth, because the data on imports and exports show that imports have not yet been substituted to a satisfactory degree by local output.
Hellenic Statistical Authority (ELSTAT) figures published on Friday showed that the trade balance deficit amounted to 1.51 billion euros in July, against 1.43 billion in July 2016, posting a 5.9 percent rise. When fuel is excluded, the deficit’s increase comes to 9.7 percent and when fuel and ships are excluded the difference year-on-year comes to 14.6 percent.
In the first seven months of the year the trade deficit came to 13.14 billion euros, compared with 11 percent in the same period last year, i.e a considerable rise of 19.1 percent. Last year the deficit had also shown an increase in comparison with 2015, but this was largely due to the significant decline in imports because of the capital controls imposed in the second half of 2015.
The Panhellenic Exporters Association expressed its strong concern in a statement, seeing imports rise by 6.5 percent in July year-on-year to 3.92 billion euros, taking the total rise in imports in the year to end-July to 17.6 percent, reaching 29.76 billion euros.
There was also a rise in exports, largely thanks to fuel prices: Including fuel, exports rose 6.5 percent from a year earlier to 2.41 billion euros, but when fuel is excluded the rise amounts to just 0.5 percent. In the January-July period the total value of exports including fuel came to 16.62 billion euros, up 16.5 percent from the 14.27 billion of 2016, but excluding fuel the annual increase of exports does not exceed 6.7 percent in the year to end-July, according to ELSTAT data.
