Greece increasingly whets appetite of foreign investors

The number}of companies planning to invest in Greece is growing on optimism that its attractiveness as an investment destination will improve in the long term, a survey by EY Greece has found. 

At the same time, a record number of foreign direct investments (FDI) in Greece in 2020 was followed by a slowdown in 2021, although last year’s number of FDIs is considered the second-highest in the last 22 years, according to the EY Attractiveness Survey Greece 2022.

Improving the education system and skills, reducing taxation, supporting the high-tech sector and strengthening small and medium-sized enterprises are the challenges the country will have to tackle to improve its attractiveness.

Therefore, according to the survey presented on Wednesday at the fifth InvestGR Forum, last year 30 FDIs were carried out in Greece, a number that may be reduced compared to 2020 (39), but is the second best performance of the country since the beginning of the survey in 2000. 

This figure corresponds to just 0.51% of all investment in Europe (from 0.70% in 2020) and ranks the country in 26th place (from 23rd) among the 51 countries participating in the survey. Cumulatively, the investments of the last two years represent 24% of all investments made in the last 22 years.

In the meantime, the survey carried out on a sample of 250 executives of foreign companies between March 15 and April 15 showed a shift to investments with a relatively high added value. Last year, it found, 30% of FDIs concern investments in headquarters, 20% industrial activities, 17% sales and marketing offices, while a corresponding percentage concerned logistics activities.

The top sectors where investments were directed in 2021were agri-food (20% of investments), transport and logistics (20%), and software and IT services (17%).

Regarding the willingness of businesses to invest in the country, it seems to be on the rise from previous years. Despite the war in Ukraine and the uncertainty stemming from geopolitical factors, the percentage of companies planning to invest or expand their activities in the next year is rising, reaching 37% in 2022 from 34% last year and 28% in 2020.

However, the war is affecting investor choices, with one in three businesses (32%) saying they have postponed planned investments until 2023 or later.

Despite the impact of the war in Ukraine, most participating companies answered affirmatively regarding the attractiveness of Greece as an investment destination in the long term. Three out of four investors (75%) remain optimistic, estimating that its attractiveness will improve over the next three years. This percentage has been consolidated recently and places Greece far above the average rate for Europe as a whole (64%).

Finally, 58% of businesses – down from 62% in 2021 – estimate that over the last year the image of the country as an investment destination has improved, a decrease linked to the negative outlook caused by the war and its serious economic effects.