The decline of crude oil prices, down by 35 percent over the past nine months, if calculated in euro currency terms, is expected to add approximately one percent to Greece’s GDP figure for 2015, according to a National Bank of Greece study.
The study, which noted that the Greek economy remains heavily oil-dependent, also forecast the oil price drop will reduce the country’s trade deficit and increase the current account surplus, by 0.4 percent of GDP, in 2015.
Past trends have indicated the overall impact of oil price drops on the economy depends on the combined effect of three basic factors, the percentage drop in oil prices, the duration of lower prices, and the degree of the economy’s dependency on oil imports.
Considering that the Greek economy’s reliance on oil imports is greater than the EU average level, Greece can expect to benefit more than other eurozone members as a result of the oil price drop. Also, the price drop’s magnitude, and the expected maintenance of lower oil prices over an extended period, should further benefit the Greek economy.
The reduction in crude oil prices over the past nine months ranks among the four biggest drops over the past forty years.
A forecast by the National Bank of Greece, as well as specialized industry analyses, predict oil price levels will remain at levels below 65 dollars a barrel in 2015, which would represent an overall 40 percent decline, year-on-year.
Greek enterprises, especially the industrial and transportation sectors, remain heavily dependent on oil imports.