Following last month’s latest economic rescue package for Greece – when eurozone finance ministers agreed a further €8.5bn tranche for the country from the international bailout fund – several of the country’s industries are poised for recovery, according to Atradius.
In its latest country report on Greece, the trade credit insurer notes that gross domestic product (GDP) showed a modest rebound of 0.3% in 2016 and is expected to grow up to 2.7% in 2017, given full implementation of the European Stability Mechanism (ESM) funding programme.
Greece’s economic growth this year will be driven by investment demand, higher private consumption – reflecting a decrease in unemployment, although the rate still stands at more than 21% – and increasing exports.
Atradius forecasts that the expected rebound will favour selected sectors including tourism, packaging and international transportation. Exports of agricultural goods such as olive oil, vegetables and fruit, as well as petroleum, pharmaceuticals and aluminium products are also expected to increase, benefiting from higher external demand and Greece’s improved international competitiveness compared with some European peers like Portugal and Spain.
However, it warns that the projected outlook for other industries – including construction, construction materials, textiles and financing – remains ‘tense’.
More positively, economists expect to see a 2% decrease in business insolvencies in 2017, following on from yearly increases since 2008. However, the insolvency level remains more than five times higher than pre-crisis levels before 2008. Across the sectors, food and IT/electronics are expected to record declining business failures while insolvencies in the construction, textiles and machines sectors are forecast to remain high with no decrease in insolvencies expected.
Austerity measures in Greece, alongside the current bailout scheme and capital controls limit economic growth. “Greece has continued to hit headlines over its economic crisis and, unsurprisingly, this had led to a degree of caution among British businesses about trading within the country,” says Tanya Giles, Atradius’ regional manager.
Despite the negative picture there are opportunities for successful trade [for UK exporters] providing that they are well prepared. There are pockets of positivity with open doors to international trade, the British brand is regarded strongly in Greece and with the weakening of the pound against the euro over the last year British products and services are perceived to be more competitive.
“Trading overseas demands a robust risk and credit management strategy; be prepared and businesses can seize opportunities for new partnerships, customers and growth. As standard, businesses need to develop a comprehensive knowledge of the market, not just identifying demand but understanding its economic stability, legal framework and business culture. Armed with the right information and tools businesses can reap the benefits of international trade.”
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