Greece’s economic recovery is “anemic” due to lagging investment which is undermining competitiveness and hindering any potential for growth, the report found.
According to PwC, investment is limited as a result of companies offering low yields, the ongoing credit squeeze, declining savings, increased non-performing loans, declining “soft” financing potential as well as weakened investor trust. Investment needs for 2017-2022 are estimated at around 270 billion euros.
Steps needed to make Greece an attractive investment option that will in turn facilitate growth, include boosting confidence in political processes and institutions, the active management of non-performing loans, accelerating infrastructure investments, restructuring the housing market, changing the financial sector structure, mobilizing institutional equity for small and medium size enterprises (SMEs), increasing “soft” financing and adopting a stable tax system.
The report goes on to note that Greece appears to be on the path of a “credit-less recovery”, which means that bank credit remains zero or negative in the first three years after recession. Indicatively, the combination of prolonged recession and credit shortage has blown away 64 percent of the “natural” investment in the Greek economy (2008-2016).
“The ongoing debate on the sustainability of the public debt has led to a lack of awareness in regards to the need to increase investment to support growth,” said Marios Psaltis, CEO of PwC Greece.
“The current low levels of trust involving the country do not facilitate the mobilization of Greek or foreign capital. If new investment-friendly policies are not formed, the recovery will remain anemic,” he added.