With the collapse of international trade and capital markets, the government was forced to pursue an autarky policy by imposing tariffs on imported goods and by boosting the domestic market. These measures reduced the public debt and encouraged the agricultural and industrial production. In addition, from 1933 capital started to return from abroad due to high Greek rates of interest. In this way, the gold reserves of the issuing credit institution, the Bank of Greece, increased from 7,6 million dollars in 1932 to 44,7 million in 1934. This increase had correspondent results to monetary circulation. From 4 billion drachmae in 1931, circulation reached 9,4 billion in 1939.
Already from 1933 the signs of economic recovery became obvious, but the distribution of the newly acquired wealth that was accrued due to the autarky policy, engendered strong social conflicts. The permanent crisis that hit the large exportation ports as opposed to the sudden prosperity of rural regions, the rise of industrial profits as opposed to low wages were some of the friction points that the government of the Popular Party had to deal with. However, both major parties believed rather in the reinforcement of private initiative than in the implementation of a social policy and the planning of economy. The inability of the Tsaldaris government to assume a more active administration of the economy intensified social turmoil and led to the termination of the economic recovery.