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Greece's Investment Gap
Author:
Shiqing Hua
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Ms. Marina Mendes Tavares
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Ms. Xin C Xu null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 013
Language:
English
Publication Date:
28 Jan 2022
DOI:
https://doi.org/10.5089/9798400201257.001
ISBN:
9798400201257
ISSN:
1018-5941
Pages:
28
Keywords:
Investment gap; capital stock; structural reforms; investment gap; estimating benchmark investment; household investment; investment rate; investment dynamics; Private investment; Stocks; Public investment spending; Income; Europe; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Greece’s investment rate plunged following the Sovereign Debt Crisis (SDC) and remained one of the lowest in the world in 2019. This paper explores recent investment dynamics and compares them against estimated benchmarks. Our results suggest that Greece has been under-investing since the SDC, with private investment notably lagging behind. The estimated investment gap ranges from 1.6–8 percent of GDP in 2019. Structural impediments have constrained corporate investment, while business cycle and balance sheet developments have held back household investment. Structural reforms are recommended to remove bottlenecks to corporate investment, improve efficiency of public investment, and boost household investment.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund