Determinants of Investment Activity: the Case of Greece | Eurobank
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Total investment-to-GDP ratio has plunged since 2007 in Greece, with the real capital stock declining for the first time after 50 consecutive years. In this report, we identify factors -output growth, real long-term interest rates, private credit growth and corporate taxation- that affect investment activity in Greece. Our baseline scenario -in line with the latest forecasts of the Second Economic Adjustment Programme for GDP growth in Greece- is consistent with an increase in the investment rate of 7.0 pps, from 12.1% of GDP in 2013 to 19.0% of GDP in 2020. That could result in a cumulative rise in the level of investment by roughly 90%, i.e. from €22.1bn in 2013 to €42.0bn (at current prices) in 2019.