Tuesday, 12 April 2011

Greek exports update

I keep hearing lately that Greek exports performed well in 2010. They certainly grew relative to 2009. But growing is one thing and performing well is another one.

First of all, I have to point out that Greek exports of both Goods and Services declined the most on 2009, relatively to the other peripheral countries pictured in the chart, namely Portugal and Spain. That is something that we should keep in mind since it sets a low base of comparison for Greece. Meaning that growth rates for 2010 relative to 2009 will appear artificially boosted due to this low-base effect.

source: Bank of Greece, Banco de Espana, Statistics Portugal

As we can see from the chart, despite the boost from the low base effect mentioned above, the growth rate for exports of Goods for Greece lagged those of Spain and Portugal substantially. As for Services exports growth, Greece again lagged behind both Spain and Portugal.

One reason for the growth in Greek exports is the decline in the Euro x-rate in the first half of 2010, which affects exports with a slight time lag, known as the J-Curve Effect. Another reason could be the rebound in major trading partners like Germany or other core European countries.

I am curious to see how Greek exports will perform now that the Euro has appreciated a bit. Of course, it is by no means certain that the Euro will not depreciate again in the meantime, rather the exact opposite. Furthermore, (taking a bottom-un approach for once) Greek firms appear to be ramping up their efforts to secure sales contracts abroad since the domestic market is constantly shrinking in size, something that is offering even the more introverted of them a good reason to look for sales growth abroad.

I don’t know what your definition of performing well is but when your exports are lagging behind those of the least competitive countries in the EU, I can see no reason for joy…


Since previous data are from SDDS and therefore in USD, hence they might be somewhat affected by the EURUSD x-rate here's the data in EUR.

source: Eurostat

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