The US is overturning the status quo in global trade, said Yannis Stournaras in his speech at the General Assembly of the BoG. As far as our country is concerned, he estimated that the direct impact will be limited but may be indirectly affected as the slowdown in global growth will also limit the broader outlook.
“Greece, although it has little reliance on exports to the US, may be indirectly affected by the tariff policies as an overall drag on the global economy may affect demand,” he said, among other things.
He noted that the consequences of a trade war would be negative for all economies involved, including the US, as already confirmed by the most recent economic and market data.
“Trade protectionism tends to cause a chain reaction, with the affected countries retaliating with countermeasures. This is expected to lead to an escalation of the crisis and a slowdown in global trade, with serious consequences for economic activity and growth,” he added.
He further noted that the production, processing and distribution of goods are done through global value chains, which have increased the interdependence of national economies. “Consequently, the imposition of tariffs on imports by one country will affect other countries involved in global value chains, even without the imposition of countermeasures. Ultimately, the indirect effects will act as a multiplier and affect the global economy, not just the countries on which tariffs are imposed.”
As the central banker pointed out, “Europe, as an economy with a high degree of outward-lookingness, is particularly vulnerable to such a development. Greece, although it has little dependence on the US and is therefore expected to have limited direct impact from the tariff increase, may be affected indirectly, as an overall slowdown in global trade may reduce demand for Greek goods and services and limit growth prospects. Finally, increased uncertainty in markets acts as a disincentive to investment as firms avoid taking risks in a volatile environment.”
It is noted that the US market appears to have been steadily increasing its share of total Greek travel arrivals and receipts over the last decade (with the exception of the pandemic period). Specifically, US traveler arrivals as a percentage of total non-resident arrivals to Greece increased from 2.7% in 2014 to 4.3% in 2024, while correspondingly, US receipts as a percentage of total Greek travel receipts increased from 5.0% to 7.3% over the period 2014-2024. Annual receipts from the US, which amounted to €0.7 billion in 2014, exceeded €1.5 billion in 2024, while the average expenditure per trip increased to €1,022 in 2024, compared to €653 for arrivals to Greece from euro area countries.
“For the Greek economy, the key challenge remains to maintain strong growth and accelerate real convergence towards the EU average. Beyond international and European risks, additional uncertainties include (1) potential delays in the absorption and utilization of the Recovery Fund resources, (2) the increasing frequency and intensity of natural disasters due to the climate crisis, and (3) the intensifying tightness in the labor market and higher wage increases,” the Governor of the Bank of Greece said.
