Foreign Direct Investment

According to the most recent data of Bank of Greece, the (net) inflows of Foreign Direct Investment in Greece for 2020 amounted to €3,127 million compared to 4,484 million in 2019, presenting a decrease of 30,3%. It is important to note that, according to UNCTAD estimates for 2020 (Investment Trends Monitor, January 2021), global FDI flows declined by 42% reaching the level of the 1990s. In particular, developed countries experienced a 69% decline in FDI inflows, while in the EU-27 the inflows of FDI decreased by 71%. For example, according to UNCTAD estimates, FDI inflows for 2020 decreased by more than 100% in the United Kingdom and Italy, by 96% in Russia, 61% in Germany, 49% in the USA, 46% in Australia, 39% in France and 34% in Canada.

The net FDI inflows in Greece during the period 2010-2020 (in millions of Euro).

Picture10

2019, 2020: Provisional data

Source: Bank of Greece

 

Countries of origin of investment funds

The investment activity in the country during the previous decade originates mainly from companies of major markets, such as the EU, with Cyprus, Germany and France constituting the main countries of origin of investment funds, together with Switzerland. The first ten positions are filled by the Netherlands, Canada, China (with Hong Kong) that has significantly strengthened its position during the previous years, USA, Italy and Luxembourg.

Net FDI inflows per country of origin of funds during the period 2010-2020 (in millions of Euro)

Picture11

2019, 2020: Provisional data

Source: Bank of Greece

Main characteristics:

-          The investment activity in the country originates mainly from companies of major markets, such as the EU.

-          Cyprus, Germany and France constitute the main countries of origin of investment funds during the period 2010-2020, followed by Switzerland.

-          The first ten positions in the list of countries investing in the country during the previous decade also include several non-European countries, such as Canada, China (with Hong Kong) and the USA, with said countries significantly increasing their investment presence during the last few years.

 

Sectoral distribution of foreign investment

During the last few years, the net inflows of FDI per sector of economic activity in Greece, focus mainly in the tertiary sector followed with a significant margin by the secondary sector. Most developed countries present a similar composition of FDI.

Net FDI inflows per sector of economic activity during the period 2010-2020

Picture12

2019, 2020: Provisional data

Source: Bank of Greece

Main characteristics:

-          Concertation of FDI in services. This trend was dictated primarily due to the growth of the financial system of the country, the growth of telecommunications as well as the trade stimulus, particularly before the onset of the crisis, whereas a concentration of investment in real estate management and logistics is observed during the last few years.

-          The share of the secondary sector is relatively low, compared to the capabilities of the country, a fact that suggests significant investment opportunities. The same applies to the primary sector, with very low FDI rates, in a country with comparative advantages for this sector (climate, etc.). 

 

In particular:

  1. A. Manufacturing

The manufacturing sectors with significant investment interest during the period 2010-2020 include pharmaceuticals, food- beverages and tobacco, oil products, chemicals, and, to a lesser extent, machinery and computers.

Composition of net FDI inflows in manufacturing during the period 2010-2020

Picture13

2019, 2020: Provisional data

Source: Bank of Greece

Main characteristics:

- The manufacturing sectors attracting the most investment interest during the period 2010-2020 are pharmaceuticals, food- beverages and tobacco,oil products and chemicals (excluding pharmaceuticals and plastic products). Other sectors that attract significant FDI inflows in manufacturing are machinery and computers and relevant equipment.
- The concentration of business activity in the aforementioned sectors favors both the establishment of new businesses (Greenfield investments) in Greece and the investment collaboration of foreign and Greek enterprises for the production of final products that will cover the needs of the domestic and international market.

  1. B. Services

The services sectors attracting significant investment interest during the period 2010-2020 include financial and insurance activities, real estate management (years 2018 to 2020 in particular) and logistics. It is worth noting that the category “real estate management” (according to the Bank of Greece classification) of the chart below does not include the private sales of real estate that amounted to almost €3,029 million during the period 2010-2020.

Composition of net FDI inflows in the services sector during the period 2010-2020

Picture14

2019, 2020: Provisional data

Source: Bank of Greece

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