Greece has enjoyed a steady rise in FDI in the past five years, thanks largely to a blossoming relationship with Chinese investors. However, with the Covid-19 pandemic denting the tourism industry, challenging times lie ahead. Sofia Karadima reports.
Greece typically lags behind its Western European peers when it comes to attracting foreign direct investment (FDI). However, data from the United Nations Conference on Trade and Development (UNCTAD) shows that the country has experienced a steady increase in inward FDI since 2015.
Indeed, Greece received $4.6bn in FDI in 2019, up from $1.2bn in 2015. This boost can partly be attributed to strengthened economic relations with China and Hong Kong.
China and Greece have worked in close cooperation since 2009, when Chinese state-owned shipping and logistics company Cosco won a 35-year concession to upgrade and manage container cargo piers in the port of Piraeus. Seven years later, Cosco acquired a 51% stake in the port.
Fast-forward to November 2019, and the two countries announced that Cosco was set to invest a further €600m into Piraeus Port, with the Chinese company seeking to turn Piraeus into the biggest commercial port in Europe.
Another sector that is attracting the interest of Chinese investors, as well as those from all over the world, is real estate. This popularity comes at a time when international investors acquiring properties in Greece can join the Golden Visa residency programme, which offers a permanent residence permit to non-European investors.
Ships and tourists
Other sectors that have been attracting FDI into Greece are trade and maintenance, information and communication, and chemicals. However, shipping and tourism have been the main two sources of income for the Greek economy, though with the Covid-19 pandemic negatively affecting the tourism industry, the country’s gross domestic product is set to drop in 2020, though a recovery is expected in 2021, according to data from the Bank of Greece.
Apart from Asian investors, Greece receives much of its FDI from Canada and the US. However, the majority come from European investors, with those from Germany, Luxembourg, Netherlands, Switzerland and France leading the way.