Greece is back – the road to economic recovery

Greece is open for business

Attracting foreign investment is crucial for Greece’s recovery. The improving economic climate in Greece is presenting a unique opportunity for major companies with a global footprint to take the next step and invest in Greece. U.S. companies like Exxon, Tesla, Deloitte and Pfizer are currently leading a new era of private American economic engagement. Strengthening Greece’s economy is a key U.S. priority as it will enhance bilateral relations and ensure security, stability, and prosperity in the wider region.

During the crisis, China’s Cosco also made significant investments in Greece’s main port, Piraeus -- one of the largest ports in Europe. While Greece has acknowledged the risks Chinese investments pose, it has set very clear benchmarks regarding protection of critical infrastructure.

Building a 21st century economy

Greece is determined to press on with key reforms and continue to pursue growth oriented-policies that will lay the foundations for a strong 21st century economy. The government has stepped up efforts to resolve lingering issues like non-performing loans, high unemployment, and large stocks of public debt. The current government has made it clear that initial reform packages including simplifying license procedures, lowering taxes, and promoting more foreign investment, are just the beginning. 

Like every other country, the ramifications of the coronavirus pandemic were felt throughout Greece's economy, especially of course its tourism sector. Greece made a strong rebound from the economic effects of the pandemic, and its economy has outperformed those of its Eurozone partners in 2022 and 2023. Despite exiting its bailouts, however, Greece must still continue to meet a 3.5% budget surplus target—put in place as part of agreements with the IMF and other European creditors. This requirement places an unnecessary burden on Greece. Lifting these restrictions will give Greece the space to address some more complicated issues regarding reforms and use the surplus to “turbocharge” growth. Greece has proved its financial adequacy by boasting the largest decline in debt-to-GDP since 2019 in the European Union.

Reversing the brain drain

Approximately 450,000 young, educated Greeks left the country during the crisis in search of jobs and better opportunities in other European countries, the US, and elsewhere. Reversing this brain-drain is a top priority for Greece so that it can truly ignite economic growth. Athens is working diligently to introduce measures to bring this new diaspora back through better jobs in Greece and with lower taxes. Supporting the vibrant startup culture in the country is also a key part of the government’s plan to not only spur economic activity but bring Greeks home.

THE WORLD IS TAKING NOTE

2023 was another milestone year for the Greek economy. Aside from returning to investment grade in the fall - the first time since the onset of the economic crisis - Greece also earned the praise of the IMF as a result of the "digital transformation of the economy” and “increasing market competition”. At the same time, 2023 saw the real value of Greece's stock market increase by 40%. The economy is expected to continue growing, S&P expects government debt will fall to 146% of GDP from 189% in 2020, and investment is pouring in. These facts, and the renewed optimism around Greece have earned it The Economist's prize of "top economic performer" of the year for the second time in a row. While challenges remain, Greece is poised to continue this run of form in 2024.