Greece had a positive record in investments last year, with Eurostat and Hellenic Statistical Authority (ELSTAT) figures being in agreement with the European Commission estimates for an 8.5% economic growth rate last year in Greece, the second highest in the eurozone.
Data show that the increase in investments over the first nine months of 2021, on an annual basis, was also the second highest in the euro area, after Italy’s, amounting to 16.3%. The eurozone average was about a quarter of Greece’s, at 4.3%.
Notably, Greece managed to exceed investments recorded over the last year before the pandemic, with 15.6% more than in 2019, while the eurozone fell short 2.3%.
The Greek data offer grounds for optimism, as investments can sustain a healthy form of growth in the long term, shifting the burden of economic expansion away from consumption, which currently dominates the country’s gross domestic product.
Nevertheless economists point out that this is no more than a positive first step and that Greece still has a long way to go before it covers the distance between its own investment rates and the European Union’s. For a start, they note that significant expansion is due to the low starting point, as 2020 was not only a pandemic year but also came on the back of a decade-long divestment due to the financial crisis, so Greece’s needs are considerable. The investment gap that needs to be covered is over 100 billion euros, they argue.
Analysts further observe that even after last year’s increase, investments in Greece represent only about 13% of the country’s GDP, against a European average rate of 21%. It is obvious it will take many years with high investment for Greece to approach the European average and cover the losses of the bailout years.
Figures also reveal that one of the main factors for investment growth has been construction of houses, explained by the decline of this category in previous years: Investments in residential construction soared 34.7% in 2021, compared to 2020.