Greek export performance: Tangible Signs of improvement but much more is required

Throughout the crisis era one of the focal points of structural reforms was the transformation of the economic growth paradigm of Greece from a “closed” consumption driven economy to an “open” investment and export driven one. Despite initial high hopes, until recently this change in the course of the Greek economy remained elusive. Yet, slowly but steadily change is happening and exports are getting traction. In fact, in 2018 the external sector made a positive contribution to overall GDP growth.
In the present study we attempt to contribute to the discourse on the issue of the “missing Greek exports” on more than one levels. Our ambition is to move beyond a simple descriptive narrative on the volume and destination of Greek merchandise exports and dwell upon issues such as:

  • which are the product categories that Greece enjoys a comparative-competitive export advantage,
  • examine the association between Greek exports and product sophistication and complexity,
  • present a top-down analysis of the number and size of the Greek exporting firms and,
  • last but not least examine the extent of Greece’s participation to the Global Value Chains.

Based on our analysis the key findings are the following:

  • The gap between exports and imports, as a % of GDP, closed during the crisis period. The return of external sector to balance was the result of a stabilization in imports (to around 34% in 2017) and a substantial pick-up in exports (to 33% in 2017 up from 23% in 2008).
  • Despite this recent improvement, in a global context, Greece remains a “closed economy”. In particular, Greek trade openness as a percentage of GDP accounts to 67% versus 90% of EA19 average in 2017.
  • Greece has global revealed comparative advantage in 22 out of 63 product groups, accounting to 69.5% of Greek exports, and excluding “petroleum products” to 40.4%.
  • Greece has comparative advantage mostly in exported goods with low global productivity level, accounting to 31.9% of Greek exports.
  • Excluding petroleum products, only 8.5% of Greek exports have comparative advantage and at the same time are of high global productivity level.
  • Greece could increase its export potential by emphasizing in goods of high productivity level that now has comparative disadvantage and their total current share is estimated at 15.6%.
  • When measuring the productivity level associated with a country’s exported goods, Greece exhibits a moderate sophistication level of its export basket and ranks 51st out of 172 countries.
  • The technological content of Greek exports is low. In 2017, the share of high technology products in Greek exports stood at 4.3%, the lowest in EU28.
  • Only a small percentage of Greek enterprises (mostly SMEs) exports, estimated around 2-3% in 2016.
  • Consequently, Greek exports are highly concentrated. The top 5 exporters account for 23% of total goods exports. The top 1,000 firms account for 81% of Greek exports.
  • The wholesale trade and the manufacture of refined petroleum products are the two big exporting “star-sectors”.
  • Greece’s participation in the global value chain increased over the past decade from 36% in 2005 to 40% in 2015.

    • That was mainly due to the increased backward participation. Greek gross exports embody more foreign value added than ten years ago to 25% from 19%.
    • On the other hand, regarding the forward participation, the Greek content in foreign exports as a percentage of gross exports fell behind to 15% of gross exports from 17%.