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How can Greece’s economy achieve sustainable growth? Estimating the impact of alternative policy measures

The report examines several alternative policies. The most promising one involves targeted policies that attract FDI combined with pension-related fiscal policy reforms. Projected FDI inflows into three sectors identified in the report (combined with pension-related reforms) are expected to bring about incremental benefits to the economy. Under this scenario, which is estimated to initially require modest increases in FDI inflows (of about € 2 billion per year above the baseline level), real GDP is 5 percentage points above the baseline level by the end of 2021 and 9 percentage points higher by the end of 2028. The bulk of this jump is attributable to real fixed investment, which is 15.5 percentage points above the baseline projection by end 2028; exports of goods and services, which are 28 percentage points higher at the end of the forecast period. Employment is 5.3 percentage points higher in 2028.