According to statistics compiled by the OECD, direct foreign investment (FDI) in Greece increased by 62 percent in the last three years.
From an average of $4.15 billion in the three-year period 2017-2019, it reached $6.7 billion in the three years 2021-2023, as the Greek economy recorded significant growth rates.
In 2020, they had fallen to $3.2 billion, but this was due to the coronavirus pandemic that led to a halt in economic activity, with global FDI plunging 58 percent on that year.
In 2021, FDI in Greece jumped to $6.3 billion to reach an all-time high of $8.4 billion in 2022. Last year, they fell to $5.4 billion, a level that is nevertheless higher than in the years of the 2017-2019 period.
According to the OECD report, FDI involves the acquisition of equity capital, often through acquisitions and mergers or the creation of new production units, the reinvestment of profits and intra-business borrowing.
The increase in direct investments by Greek companies abroad was also spectacular, a development that also reflected the growing strength of the Greek economy.
From just 429 million dollars on average in the period 2017-2019, investments abroad jumped to 2.8 billion dollars in the three years 2021-2023. They continued to grow in 2023, reaching almost 4.0 billion dollars. The FDI Outward Position in 2022 amounted to 16.7 billion dollars or 7.7 percent of GDP.
Global FDI flows drop
According to the OECD report in 2023, global FDI flows dropped by 7 percent, to USD 1 364 billion, maintaining their downward trajectory and remaining below pre-pandemic levels for the second year in a row.
In 2023, FDI inflows decreased in more than two-thirds of OECD economies; nevertheless, significant drops in other economies also played a role in the total downturn. The report notes, China, in particular received record low FDI flows in a general context of ongoing geopolitical tensions and high interest rates.
The countries with the largest decrease (more than USD 20 billion) were Australia and the United States, attributed to lower reinvestment of earnings in both, decreased equity flows in the former and movements in intra-company loans in the latter. Sweden also recorded important falls, largely due to lower equity inflows.
Major disinvestments recorded in the Netherlands in 2023, as well as in Luxembourg in the previous year, explain negative values in FDI inflows of the EU group for the second year in a row; yet important disinvestments were also recorded in the United Kingdom.
Direct Foreign Investment to Greece
Technology giants, such as Amazon, Google, Digital Realty, and Microsoft have strengthened their presence in Greece in 2023 by investing in data centers, making the country a hub of innovation.
Investments in Greece are driven by the strategic geographical position of Greece, which is a hub connecting Europe with Africa, the Middle East, and, by extension, Asia, as well as economic and political stability after the ten-year economic crisis.
Furthermore, the improvement of infrastructure and especially the high-quality human resources of Greece are key element that has put Greece on the radar of large companies.
Greek businesses are also making an effort to adapt their operations to new technological developments.
According to a recent survey by Ernst and Young Greece, in the last five years, 86 percent of companies that participated in the survey have implemented at least one transformation project. At the same time, more than half of the companies in the survey (54 percent) said that they had completed more than two.
Related: The technology giants that invest in Greece