Tuesday, December 3, 2013

Has internal devaluation really helped Greek exports?

The performance of Greece’s exports has been one of the main disappointments of the troika-led program. One of the pillars of Greece’s adjustment was meant to be internal devaluation, which through a number of reforms that would stimulate growth, absorb the collapse of domestic demand and re-direct production and capital to tradable goods.
In the report it handed to the Greek government earlier this week, the OECD takes a detailed look at the performance of Greek exports and highlights a number of factors that are holding back their growth. Many of these elements are related to the policies pursued by the troika and Greek governments since the crisis erupted.
The Greek share in exports markets has been steadily declining since 2008 and the reforms implemented since 2010 have not had much of an impact in averting this trend. The decline in exports over the last three years is led by the exports of services. For instance, maritime transport exports, where Greece is known to have a competitive advantage have been weak due to the slow pace of global trade and oversupply in the shipping sector since 2010, as the OECD highlights.
Furthermore, tourism revenues were badly damaged by the political uncertainty and repeated statements by European politicians in 2012 putting the country’s euro future in doubt.
Source and full story: MacroPolis, 30 November 2013

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