Greece’s economy is set to continue outperforming the eurozone and EU average through 2026, driven by strong domestic demand and EU-funded investment, the European Commission said on Monday in its spring economic forecast.
The Commission revised its 2024 growth outlook for Greece upwards to 2.3%, from a previous estimate of 2.1% made last autumn. It maintained its projections for 2025 and 2026 at 2.3% and 2.2%, respectively.
“Growth will remain robust, supported by sustained consumption and increased investment financed by EU funds,” the Commission said.
Inflation is expected to moderate over the next two years, from an estimated 3.0% in 2024 to 2.8% in 2025 and 2.3% in 2026. However, strong wage growth and resilient demand are likely to continue putting upward pressure on consumer prices, the report noted.
By comparison, euro area inflation is forecast at 2.4% in 2024, easing to 2.1% in 2025 and 1.7% in 2026.
Greece’s unemployment rate is projected to decline gradually, from 10.1% in 2024 to 9.3% in 2025 and 8.7% in 2026.
In 2024, the Greek economy expanded by 2.3%, buoyed by strong private consumption, rising investment, and inventory buildup. Despite a contractionary fiscal stance, robust domestic demand drove a notable increase in imports, while export growth lagged, resulting in a negative contribution from net exports.
Looking ahead, implementation of Greece’s EU-backed recovery and resilience plan is expected to drive investment growth in 2025 and 2026. Combined with solid income gains, this will continue to support household consumption, keeping GDP growth above its long-term potential.
The Commission expects Greece to be only mildly impacted by U.S. tariffs, citing limited trade exposure. However, downside risks to the outlook have risen. Continued geopolitical tensions, global economic slowdown, or rising trade uncertainty could weigh on Greek exports, particularly in tourism.
On fiscal performance, Greece recorded a substantial budget surplus in 2024, which is expected to be maintained. The country’s debt-to-GDP ratio is forecast to decline to 140.6% by 2026, supported by strong nominal GDP growth.