Greece is looking good to foreign investors. Even amid the global coronavirus pandemic, the country continues to offer bright prospects and future promise.
Foreign investment in Greece remains surprisingly resilient, which bodes well for the country as it prepares for the next stage of economic transformation with its ambitious national recovery strategy.
The latest data from the Bank of Greece show that foreign direct investment in the country in 2020 totaled €3.13 billion. Despite an overall decline of about 30% from record 2019 levels, last year marked one of Greece’s best performances in the last two decades in terms of attracting FDI.
This reflects Greece’s continued appeal as one of Europe’s most promising investment destinations, particularly in its robust tourism and export sectors. By comparison, FDI inflows to the 27 European Union member-states fell a combined 71% last year, according to UNCTAD, and were negative in countries like Italy and the UK where investors divested assets.
Several sectors of the Greek economy even posted significant gains in FDI. Foreign investment tripled in both pharmaceutical production and in the country’s hospitality sector, compared to 2019. Food production received 21% more FDI, and overall foreign investment in manufacturing capacity across all sectors rose 66%.
Recently, the Greek government also announced its ambitious €57 billion recovery program – Greece 2.0 – that promises to remake the Greek economy through investments in clean energy, digital transformation, education and social services. The program envisages 118 investments and 64 reforms, including several to boost competitiveness, exports and improve the business environment.
The recovery plan has the potential to take Greece’s two powerhouse sectors – tourism and food – to the next level. Equally, it will accelerate the growth potential of emerging sectors like clean energy, technology, life sciences, and logistics. Attracting FDI will be crucial to realizing this potential.
The strong performance of key sectors in the Greek economy, in spite of the pandemic, demonstrates the country’s potential for attracting foreign investment. The key challenge for Greece now is to make good on those reform promises in the service of attracting still further FDI in the years ahead and so leverage the existing – and future – strengths of the country to build sustainable economic growth.