Low Productivity and the Investment Gap: “Thorns” for the Greek Economy

Low productivity and a large investment gap remain major “thorns” for the Greek economy, according to a report published today by the OECD. At the same time, low innovation and the slow adoption of technologies by businesses continue to limit Greece’s growth potential.

According to the report, the Greek economy has held up well during recent crises and has outpaced the eurozone in growth rates in recent years. The per capita GDP gap relative to the more advanced OECD economies has begun to narrow, as increased capital intensity, job creation, and structural reforms have supported a steady recovery from the prolonged crisis. However, progress has been constrained by weak productivity gains, while the investment gap, though narrowing, remains large, and many businesses, especially smaller ones, continue to struggle with adopting digital technologies and innovating.

The OECD report notes that in order to raise incomes, competitiveness must be ensured and large spending needs must be met, while at the same time further debt reduction is needed, productivity must be boosted, and the improved conditions in the labour market must be maintained. It also notes that if small and medium-sized enterprises had better access to financing, they would innovate more and invest in more advanced technologies.