Greek economy: Is it competitive or not? 

Greek economy: Is it competitive or not? 

A lot of talk followed the publication of the World Bank’s “Doing Business 2019” report on Greece, with “experts” rushing to point out that another 5 places were dropped in the global ranking in terms of the Greek economy’s competitiveness.

First of all, the authors of the report admit that there are significant limitations to its methodology and that it is not feasible to draw general conclusions about the business environment.

As they characteristically stated, “the data collected refers to businesses in the largest business city of the economy and may not be representative of other parts of the economy”, while “data is often focused on a particular business form – a limited liability company (or its legal equivalent) of a certain size – and cannot be representative of regulation in other businesses, i.e. individual enterprises”.

Similarly, “Doing Business 2019” doesn’t compare rankings with previous years, but only scores! The “Doing Business 2018” and “Doing Business 2019” publications did not introduce significant methodological extensions. As a result, last year’s ratings are not redefined, but it is noted instead that “the most important thing is that economies need to assess their progress with historic performance using scores in doing business (DB) instead of ranking. With the convenient scoring, it is difficult to see how close the economy is to better regulatory performance at any given time and how much progress has been made to improve the regulatory environment over time”.

Above Germany!

At the same time, it is striking that Greece ranks above Germany in three indices (start-up, protection of minority investors, cross-border trade) without this finding being stressed by various experts. Still, the inadequate nature of the “DB” entrepreneurial measuring places countries such as Ukraine, Albania, Peru, Kenya and Rwanda above Greece. According to the Global Entrepreneurship and Development Institute (GEDI), these five countries were 20 to 50 places below Greece in the entrepreneurship index in 2018.

Greece’s rise in numbers

However, besides the report, a series of figures prove the Greek economy is recovering:

– In the first half of 2018 there is an annual increase of 17% in Foreign Direct Investment, while in the year 2017 there was an increase of 57% compared to 2014.

– In the first 10 months of 2018 there was a 33% annual improvement in the consumer confidence index.

– In the first 10 months of 2018, a 9-year improvement of 9% and 7% was recorded in the PMI and Economic Climate Index respectively.

– The Institute of Economic and Industrial Research (IOBE) estimates investment growth of 4% in 2018 and over 11% in 2019.

– In the third quarter of 2018, SMEs show the highest annual growth (13.7%) in the confidence ratio, compared with 11.3% for large and 4.8% for very large enterprises (ICAP, Oct. 2018)./IBNA