Greece was included in the top three countries globally with the most rapid improvement in the business atmosphere along with Argentina, and India, climbing from 62nd to the 38th spot, marking a 28-place jump among the 82 countries examined, according to the Business Environment Ranking by the Economist Intelligence Unit.

As the EIU’s VAR model (Vector Autoregression) indicates, Greece witnessed the most noteworthy improvement, thanks to the pro-business government of the country, which has launched widespread reforms, cut taxes, and undertaken initiatives to boost business confidence.

More significantly, the EIU’s VAR model indicates that these improvements are likely to result in a rise in real GDP per capita, investment expenditure, and foreign direct investment (FDI).

The vector autoregressive (VAR) model is a workhouse multivariate time series model that relates current observations of a variable with past observations of itself and past observations of other variables in the system

The latest ranking also reveals that Singapore, Denmark, and the United States are predicted to have the best business environments in the next five years, with Singapore expected to maintain its top position for the 16th consecutive year. Several economies in Western Europe, along with Canada, Hong Kong, and New Zealand, constitute the remaining top ten best countries in the world for business activity.

What the Economist’s VAR measures

The VAR model measured two decades worth of data, successfully predicting which countries were poised for notable economic growth and thus favorable destinations for future direct investment expenditures.

The business environment index not only includes quantitative forecasts such as increasing market opportunities but also incorporates challenging indicators with strong predictive power, such as potential forthcoming policy changes, demand from key trading partners, and changes in the institutional environment.

Argentina’s sharp improvement in the index largely reflects the market-oriented reforms expected to be introduced by newly-elected President Javier Milei, such as policies to bolster private enterprise and attract foreign investment.

The report notes that India stands out as the only market offering a dynamic scale comparable to that of China. India’s youthful demographic profile promises both strong demand and good labor availability, and the EIU anticipates rapid economic growth between 2024 and 2028, with an increase in FDI in the manufacturing sector as companies seek to diversify their supply chains away from China.