Greek Entrepreneurship (February 2019)
By turning to foreign markets, over the two-year period 2017-2018 Greek enterprises have been striving to regain the lost ground of the crisis years. Specifically, exports of non-oil goods posted an average annual growth of 10 per cent, and tourism receipts an average annual growth of 11 per cent. As a result, Greek companies have succeeded in gaining market share in international markets and have resumed investment plans.
The recovery appears to be broad-based and covers virtually all sectors of the Greek economy:
- Most export-oriented sectors managed to increase market share in European markets, led by (i) olive oil, (ii) materials (steel, marble, aluminium, copper), and (iii) services (hotels and airports) boosted by the growth trend in Greek tourism.
- Demand growth was also reported by the majority of sectors that focus mainly on the domestic market – whether due to structurally higher demand (e.g. renewable energy and IT) or a corrective shift away from the bottom of the crisis (e.g. car trade, food services).
As for 2019, domestic momentum is expected to shield against external pressures stemming from the global slowdown:
- Stronger consumer confidence (buoyed by stronger disposable income) should help support private consumption.
- Investment sentiment is positive, showing a tendency to cover the gap left by the years of economic crisis.
In the medium-term, two interrelated parameters will determine the momentum behind the recovery of the Greek economy:
i.The speed of consolidation of the business sector (as small enterprises are struggling to keep up with larger businesses in returning to their pre-crisis operating status).
ii. The speed at which reforms to boost competitiveness are implemented, leading to higher foreign investment. Based on global competitiveness indicators, although there has been some improvement, the institutional deficit against the EU remains substantial.