Greece's Current Account First Half of 2016

Below are the statistics of Greece's current account from January-June 2016, compared with the same period of the previous year. The same comparison is made for the month of June alone. All numbers are in BEUR.

		January-June			June
		2016	2015		2016	2015
Revenue from abroad
	Exports	11,6	12,6		2,0	2,2
	Services (e. g. tourism)	9,2	12,7		2,9	3,4
	Other income	3,6	3,6		0,8	0,3
	Current transfers	1,1	1,2		0,3	0,1
		------	------		------	------
	Total revenue from abroad	25,5	30,1		6,0	6,0
Expenses abroad
	Imports	19,9	22,2		3,4	3,6
	Services (e. g. tourism)	4,6	6,7		0,8	1,1
	Other expense (e. g. interest)	2,5	3,5		0,6	0,6
	Current transfers	1,0	1,6		0,2	0,2
		------	------		------	------
	Total expenses abroad	28,0	34,0		5,0	5,5
Net foreign balance (current account)		-2,5	-3,9		1,0	0,5
Trade balance		-8,3	-9,6		-1,4	-1,4
Services balance		4,6	6,0		2,1	2,3
Other balance		1,1	0,1		0,2	-0,3
Current transfer balance		0,1	-0,4		0,1	-0,1
		----	----		----	----
Net foreign balance (current account)		-2,5	-3,9		1,0	0,5

Here is the press release of the Bank of Greece commenting the above results.

At first glance, the figures look dismal: during the first 6 months of 2016, revenues from abroad declined by 4,6 BEUR! The fact that the current account balance registered a healthy improvement of 1,4 BEUR is due to the fact that expenses abroad declined even more than revenues (by 6,0 BEUR).

Much has been written about the poor export performance. Here it must be noted that the above figures are a bit distorted because both, exports and imports, are composed of 3 categories: oil, shipping and "other goods". It is the category of "other goods" which most people mean when they refer to Greece's exports. Below are the statistics for that category:

Exports "Other Goods"		8,9	9,1		1,6	1,7
Imports "Other Goods"		16,0	16,0		2,8	2,8
		----	----		----	----
Balance of goods excluding oil and ships		-7,1	-6,9		-1,2	-1,1

Both, for the 6 months as well as for June alone, exports declined while imports remained stable. It would obviously be better if it had been the other way around.

Having observed the development of Greek exports for over 5 years by now, I think emphasizing the importance of export growth is a bit like beating a dead horse. It seems unlikely that exports will ever be the growth engine for the Greek economy.

The more I think about it, it may indeed be best for Greece to return to a simple economy à la 1950's and 1960's, i. e. an agrarian economy with simple support manufacturing and an emphasis on exporting the related goods. Of course, that will require investment in food processing plants and the like thereof. And good old tourism and shipping should be the major drivers of growth.