BoG governor Stournaras: Food and beverage sector leading Greek manufacturing industry

The role of the domestic food and beverage index was fundamental for the Greek manufacturing industry and the Greek economy in general, Yiannis Stournaras, Bank of Greece’s governor said, addressing the annual general assembly of the Federation of Hellenic Food Industries on Wednesday.

The central banker said that the food and beverage industry was dynamic, extrovert and competitive, with significant investments and business activity in Greece, the Balkans and throughout Europe, a leader among manufacturing sectors. During the recession years, the food sector production fell steadily, with an average annual decline rate of 3.0 pct in the period 2008-2012, while beverage production shrank by an average annual rate of 6.2 pct in the same period, but began recovering from 2014 onwards helped by an increase in tourism.

In his speech, Stournaras referred to the necessary of boosting exports and noted that a prerequisite for boosting extrovert businesses were new investments. To attract foreign direct investments, the country needed to implement a stable and modern tax system, to lower non-payroll costs, to encourage innovation and exports and to create a predictable economic environment friendly to business activity and to implement without any further hesitation a privatization program. Attracting and preserving foreign direct investments will support the country’s exit from the crisis and achieving sustainable growth, while new investments will expand the country’s export base and improve the quality of Greek exports.

Stournaras said that a more efficient coordination and closer cooperation between representatives of the food & beverage sector could contribute in the improvement of efficiency and higher performance of efforts to promote Greek products abroad. The Greek central banker noted it was a great challenge to transform the economy from a low technology intensity -comprising mostly of small- and medium-sized enterprises- to a medium and high intensity technology economy.

Evangelos Kalousis, president of the Federation said that “in an extremely unstable business environment, the Greek food and beverage industry continues to be one of the most dynamic, competitive and extrovert sectors, accounting for 25 pct of industrial production and with an annual turnover of 14.2 billion euros”. He noted that the industry’s exports totaled 4.5 billion euros to the Balkans, Europe and the United States. Kalousis said the Greek food and beverage industry was trying to survive and to overcome hurdles created by a six-year crisis, by dealing problems as a huge challenge to build a better future for itself, workers and consumers. “Our common goal is to create high-quality Greek products for the Greek and foreign markets,” he noted.

He underlined, however, that the food industry was dealing with an unstable business environment, adverse consequences from the imposition of capital controls, a continuous decline in the purchasing power of consumers and great sence of uncertainty prevailing in the market. He noted that sales of milk and bread fell 5-7 pct in the first two months of the year.