Greek Economy: Concerns Rise as Foreign Direct Investments Plunge by 40%

The figures regarding direct foreign investments in Greece made during 2023 are sufficiently concerning, as the government has set high expectations for this year in terms of overall investment.

More specifically, foreign direct investments in Greece dropped significantly in 2023, according to preliminary data from ELSTAT, totaling 4.48 billion euros, a 40% decrease from the previous year and returning to 2019 levels. In 2022, Greece had recorded a historic high of 7.53 billion euros in FDI. However, while FDI inflows decreased, outflows increased by 26% in 2023, reaching 3.24 billion euros.

This slowdown in FDI comes after a surge in foreign investments since 2020 when investments jumped from 2.9 billion euros to 7.53 billion euros in 2022. The government’s ambitious target for investment expenditure in 2024, set by the Ministry of National Economy and Finance, requires a growth of over 15.1% to achieve it.

One of the critical challenges for the government is the timely implementation of projects funded by the Recovery Fund, which is vital for Greek economic development. Key tasks, such as awarding contracts for major projects and advancing programs like “Energy Efficiency at Home,” are crucial for the submission of the 4th payment request from the Recovery Fund. The government aims for an April submission, although this might not set the most favorable precedent.

The fourth installment originally planned for submission in the first quarter of 2024, amounts to 3.3 billion euros, with 1 billion euros in grants and 2.3 billion euros in loans. However, concerns arise as milestones now involve not only reforms and legislation but also project assignments, highlighting the government’s lack of readiness in many cases.

Source: tovima.com