Investments, investments, investments
A key ingredient to Greece's recent economic success
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💰 Investments, investments, investments
“How is Greece doing on the investment front? I’m interested.”
This is one of the most typical questions I get from readers.
The short answer: pretty good. The longer one: pretty good, but could be doing better.
Let’s look at the numbers.
Starting with net Foreign Direct Investment (FDI), we see that inflows into Greece are trending on an upward-moving trajectory.
Even though 2023 saw a 39% decrease in the total FDI volume compared to 2022’s record-breaking year, OECD estimated that Greek FDI has been up by 62% in 2021-2023 compared to 2017-2019.
If we look at the total number of FDI investments per year, we will see that Greece has maintained an important record over the last two years.
While FDI in Europe fell by 4% last year, Greece increased the total number of FDI investments by 6%, moving from 47 investments in 2022 to 50 investments in 2023.
This is the largest number of FDI projects in Greece since 2000.
The share of Greek FDI investments in the total European pie also grew from 0.5% in 2021 to 0.9% in 2023, ranking Greece 19th (its best position in the survey) for a second year in a row.
Greece has also been over-performing its peers in terms of FDI as % of GDP growth.
Since 2020, Greece has had a higher FDI as % of GDP y-o-y growth compared to both the EU average and most OECD countries.
If we look at its recent past, Greece had the largest investment gap across the EU in terms productive investments during the period 2013-2019.
The crisis was brutal and left a huge void in terms of productive investment capacity.
Today, Greece is an EU leader in terms of real investment.
Since 2020, Gross Fixed Capital Formation (GFCF) has been increasing consistently in Greece, with the country surpassing both the EU average and many OECD countries, by a wide margin.
2024 has continued on at a strong foot for Greece. Q1 2024 saw Greece as one of the top 7 countries in terms of GFCF volume across the EU.
Greece continues winning investors’ trust.
I’ve talked at length about the number of large investment projects and multi-national companies making their way into Greece.
But much more needs to be done.
I receive numerous messages each month from investors finding it exceptionally hard to navigate the Greek bureaucratic barriers. Many are also appalled by the painfully slow and unpredictable nature of the Greek justice system. This makes me sad.
The first Mitsotakis government worked hard to both bring top private investors and qualify Greece for a chunky part of public RRF funds. That’s an undeniable success.
The second Mitsotakis tenure seems tired. There is less vigor today in attracting top foreign companies and investors, perhaps because there is a feeling that existing successful examples are enough. There is also a palpable sense of Ministries running very slow processes for EU-funded projects and only going the fast-route for friends.
Investment attractiveness has been a key ingredient to Greece’s economic rebirth. There is no question about that.
Investments are expected to be a main driver for the country’s GDP growth in both 2024 and 2025, according to the Bank of Greece.
We need to make sure private and public funds continue trickling into the country — shared in an equitable way (so that everyone wins instead of a few insiders), from diverse sources (to avoid forming strong dependencies on funding streams that might get depleted soon) and in a sustainable way (with more incentives for productive investments vs adding to the existing real-estate bubble).
This is no time for idleness. It’s time to pump the gas even more.
So, repeat after me: Investments, investments, investments.
🏭 Economy & Business
GDP YoY growth still better than EU avg and most OECD countries
Average real disposable income up 2-4% in Greece (vs just 0.2% in EU)
Bank deposits are actually going up, despite environment of high prices
Greek businesses are bullish on increasing their investments
Manufacturing PMI lowest in 6 months, but still top one in EU
Headline inflation in Greece is one of the best globally in June 2024
Greece’s trade deficit — how much should it worry us? Hint: a lot
Market “Fear” Index fell in June. (Did you even know this existed?)
🤖 Tech & Startups
Coralia Ventures launches €22.5M fund (€300k tickets, €1.5M follow-ons)
Saronic (autonomous defense) raised $175M in Series B funding
Endor Labs (security) gets strategic investment from Citi Ventures
Plum (fintech) raised €19M in Series B and crowd-funding round
Seismos (AI acoustic sensing) received $15M in fresh funds
Zenus (facial recognition) receives $1.5M from L-Stone Capital
PolyModels Hub (pharma digitization) raises £1.1M from Marathon
🙌 Celebrating Greek wins
Greece celebrates 50 years from the restoration of democracy
Greek students win 6 medals in the International Mathematical Olympiad
Antetokounmpo and Drisbioti named Greece’s Paris Olympics flagbearers
Apostolos Filippas and team opened up unique non-alcoholic bar in NYC
📌 Spotlight: Summer Olympics
Today marks officially the beginning of the 2024 Summer Olympics in Paris.
That’s 128 years since the first modern Summer Olympics in Athens back in 1896.
A once ancient Greek tradition, now the largest and most global event in the world.
Pretty amazing, right?
That’s it for this week. I always love hearing from you. Make sure to hit that reply button.
Until next time!
Re real investments: it seems that the large majority of FDI is still in real estate acquisitions . This generates revenues for the government but we know it is not a productive investment. Golden visa was a mistake and should have been better regulated . It contributed to the housing crisis and the resulting "investments" were counterproductive.
Instead of saturated Athens ,the government should have directed golden visa schemes to the impoverished and decaying regions .Greece is not only Athens and some hot islands. The periphery lacks investment. Regional cities are dying out .