The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses. The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption. The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
Executive Summary
Greece has rebounded since the 2009-2018 financial crisis that saw real GDP decline by 25 percent. Modest growth began to return in 2019 and unemployment dropped from its crisis peak of 5 percent in 2013 to 12 percent in 2022. The Government of Greece (GoG) has implemented reforms and attracted investment by cutting red tape, boosting innovation and entrepreneurship, digitizing government services, and enabling more rapid growth in the renewable energy sector. Greece’s debt-to-GDP ratio decreased by more than 20 percent in 2022 – reflecting robust growth, fiscal adjustment, and higher inflation – and it benefits from relatively low debt servicing rates that should allow Greece to easily service its debt for the foreseeable future. Most major ratings agencies upgraded Greece’s sovereign debt rating to one notch below investment grade as of late January as a result of Greece’s sustained positive fiscal performance. The European Commission’s November 2022 forecast for the Greek economy predicted GDP growth of 6.0 percent in 2022 – nearly double the EU average – and 1.0 percent growth in 2023.
Over the past several years, the bilateral relationship between the U.S. and Greece has deepened significantly via defense and strategic partnerships, and Greece ambitiously seeks to bring economic ties to similar, historic heights. Greece is increasingly a source of solutions – not just in the fields of energy diplomacy and defense, but in high-tech innovation, healthcare, and green energy, improving prospects for solid economic growth and stability here and in the wider region.
The Mitsotakis government has pursued an aggressive investment and economic reform agenda. In recent years parliament approved dozens of economic-related bills, including a key investment law in October 2019, designed to cut red tape, help achieve full employment, and adopt best international practices – including by digitizing government services. Investors cite difficulties with Greece’s bureaucracy and lack of timely resolution in cases in litigation as impediments to investment.
Greece’s government maintains an estimated $38 billion cash liquidity buffer as of June 2022. Capital controls were completely lifted in September 2019 and Greece successfully exited the European Commision’s economic Enhanced Surveillance Framework in August 2022. Greece will remain subject to post-program surveillance monitoring by euro area creditors until it repays 75 percent of financial assistance, expected in 2059.
The health of Greece’s banking system has improved significantly following the financial crisis, in part due to substantial reductions of non-performing loans (NPL), including via the securitization of NPLs through the “Hercules” program. The NPL ratio decreased from a crisis high of 45 percent in 2017 to less than 10 percent at the end of 2022.
Greece’s return to economic growth has generated new investor interest in the country. From 2011-2022, the U.S. was the 8th largest source of foreign direct investment in Greece. Investments by Applied Materials, AWS, Cisco, Deloitte, Digital Realty, Google, J.P. Morgan, Meta, Microsoft, and Pfizer are projected to have an economic impact worth billions of dollars over the next few years.
In January 2023, Fitch Ratings upgraded Greece’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BB+’ from ‘BB’. In September 2022, Moody’s affirmed its outlook of the Greek banking system as “stable.” Standard & Poor upgraded its credit rating for Greece to BB+ in April 2022. Greece repaid its International Monetary Fund (IMF) loans in April 2022, two years ahead of schedule.
With 32 billion euros in European Recovery and Relief Facility (RRF) funds set to flow into the country over the next five years, many anticipate continued strong growth.
From July to November 2022 electricity prices for Greek consumers increased nearly 300 percent compared to the same period in 2020. To shield consumers from these record-high prices, the Government of Greece spent more than €5 billion ($5.25 billion at the current exchange rate) since July 2022 subsidizing the retail cost of electricity and offsetting as much as 90 percent of the price increase over 2020 rates. To help pay for these subsidies, the Grece expanded a cap on the wholesale prices of renewable energy to cap prices of wholesale electricity for all power producers to capture windfall revenues. The proceeds captured by this windfall tax have offset the government’s subsidy spending by nearly 45 percent while record tourism receipts have helped plug the remaining budgetary gaps.
To access the ICS, visit the U.S. Department of State at Greece - United States Department of State.