By Alexia Sotiriou

The Greek economic sentiment index rose to 108.1 points in January from 101.6 points in December and 101.0 points in the same month last year, the Foundation for Economic and Industrial Research (IOBE) said in a report.

IOBE, in its monthly report, said the new increase was due to a general improvement of the climate, as growth rates remain higher than the European average, inflation is falling, while unemployment continues to decline, contributing positively to real household income.

However, the adoption of economic policy measures by the new US president may cause significant disruptions in international trade, which may also affect Greece's domestic economy.

Industrial production up 5.9% in December

In addition, industrial production increased by 5.9% in December compared to a year earlier. The trends in the individual sectors of industry in December were mixed. Specifically, an increase was recorded in manufacturing (3.7%) and electricity (16.4%), but a decline in mining and quarrying (-4.3%). In sectors of high importance for the Greek economy, an increase was recorded in basic metals (14.8%), pharmaceuticals (13%) and food (6.4%).

In the third quarter of 2024, the employment in industry increased by 0.3% to 429.1 thousand people compared to the corresponding quarter of 2023. The labor cost index in manufacturing stood at 112.7 in the third quarter of 2024, recording an increase of 5.2% compared to a year ago.

The European Investment Bank provided funds totaling 2.2 billion euros to Greece in 2024.

“Greek businesses are demonstrating remarkable resilience and optimism, even amid global economic uncertainties,” said EIB Vice-President Yiannis Tsakiris. “The EIB Group remains committed to supporting the country’s investment ambitions, ensuring that local businesses in Greece have access to the financing they need to thrive in a competitive global landscape.”

According to a survey, the share of companies investing in the country has been increasing over the last years, reflecting the continued strong performance of the Greek economy. “Investment prospects are positive. Greek companies are, overall, positive about the economic climate, and the availability of external and internal financing.”

Greek companies appear more optimistic than other EU companies. The only exceptions are SMEs and companies in the construction sector, which express reservations about the political and regulatory climate.

Some findings of the survey include:

Greek businesses are more involved in international trade than their EU counterparts (74% vs. 63%), being twice as likely to import from abroad. However, they are still significantly affected by trade disruptions, although these concerns are easing in the rest of the EU.

88% of Greek businesses report facing frictions in the EU single market when exporting within the bloc, compared to just 60% of EU businesses overall.

Red tape remains a challenge. 63% of Greek businesses employ staff to handle administrative requirements, compared to 86% in the EU. In the construction and infrastructure sector, as well as among small and medium-sized enterprises, 1 in 4 businesses employs more than 10% of its workforce solely for bureaucratic compliance reasons.

70% of Greek companies stated that they are affected by climate change. Furthermore, 60% of Greek businesses are taking action to adapt to climate change, levels higher than the European average of 48%.

On the other hand, Greek businesses are less likely to take preventive measures or reduce carbon emissions compared to the EU (77% vs. 91% respectively).

Investments in the green transition are also lower than in the EU as a whole. Greek businesses are much less likely than European companies to have already invested in mitigating the effects of climate change and are less likely to plan future investments. It is noteworthy that 32% of Greek businesses report investing in energy efficiency in 2023.

Innovation and digitalization are a key source of business competitiveness. In this respect, Greek companies are faring well compared to the European average, with around 3 in 10 (29%) reporting innovation activity in 2023. In terms of the use of digital technologies, the figure reaches 53% compared to 74% in the EU. On the other hand, Greek companies are leading the way in the adoption of drones and are equally likely to adopt 3D printing.