Greek reforms drawing higher value-added investment, credit upgrades
Drawn by its support for businesses, innovation and human resources, foreign investors continue to see opportunities for Greece as the country moves ahead with a sweeping reform and restructuring program that is gaining the approval of international credit analysts.
A recent global survey by consultancy EY underscores how Greece’s investor-friendly policies are leading both to increased foreign investment and new, higher value-added projects, that have placed Greece among the top 20 European countries surveyed for the first time. At the same time, the market-oriented policies of the past few years – combined with fiscal reforms – are ensuring future growth and its investment grade status, says ratings agency Standard & Poor’s.
“This year’s fifth edition of the EY Attractiveness Survey Greece confirms that our country’s performance is improving, and Greece is gradually finding its rightful place on the global investment map,” says Georgios Papadimitriou, Country Managing Partner of EY Greece. “The number of investment projects, as well as the intention for further investments, is increasing, their qualitative composition is improving, while the level of investor optimism for enhancing the country’s attractiveness over the next three years is among the highest in Europe.”
In particular, the report notes that some two-thirds of businesses surveyed say the country’s efforts to promote innovation and human resources are among the top reasons for investing in Greece. It adds that a growing share of foreign investments is being directed into knowledge-based activities, such as software and information technology services, that are helping to further transform the country’s economy.
In a separate report, international credit ratings agency S&P cites the structural and budgetary reforms Greece has undertaken in the last decade – and which it sees continuing – as justification for returning Greece to investment grade status. The one notch upgrade, to BBB- from BB+, is the latest in a series of ratings upgrades for the country with further upgrades expected in the months ahead.
The S&P announcement also highlights Greece’s strong growth dynamics forecasting real GDP growth of 2.5% this year and averaging 2.6% over the next three years. “Expanding investment flows, improving labor market outcomes (unemployment is expected to decline to 9.2% next year from the peak of 28.2% in third-quarter 2013), and supportive credit conditions following banking sector normalization will underpin growth in the coming years, which we project will average 2.6% over 2024-2026,” the report says.