Greece’s economy is forecast to maintain its strong momentum and grow by 2.1% this year, 2.2% in 2026 and 1.7% in 2027, a rate multiple of the eurozone for the years 2025 and 2026.
The main drivers for maintaining the growth momentum of the Greek economy, according to the Commission’s autumn forecasts, are consumption and investments supported by European funds.
The debt is estimated to continue to decline to below 140% of GDP in 2027. A reduction that is estimated to come from both nominal GDP growth and primary surpluses.
For the first time, the forecasts incorporate estimates for 2027, with the European Commission noting that “GDP growth is expected to moderate to 1.7% in 2027, as the Recovery and Resilience Fund (RRF) comes to an end.”
“Greece’s fiscal outlook remains favourable for the period 2025-27, with broadly stable primary surpluses despite tax cuts and social measures,” the Commission noted. It added that while the economy has so far shown resilience to external challenges, a prolonged increase in geopolitical or trade uncertainty and financing costs could significantly weigh on exports — particularly in the tourism sector — and investment activity.
Inflation is expected to decline gradually, from 2.8% this year to 2.4% by 2027, as strong demand and projected increases in energy prices put upward pressure on consumer prices.
Strong nominal GDP growth and fiscal surpluses are expected to continue to reduce the debt-to-GDP ratio, from 147.6% this year to 142.1% in 2026 and to 138% of GDP in 2027.
Investment activity is projected to remain strong in 2025 and 2026, supported by double-digit growth in corporate financing and the implementation of the RRP. Growth is estimated to reach 6.9% in 2025 and 7.1% in 2026, before falling sharply to 1.5% in 2027.
Unemployment is falling to levels not seen in over a decade, but structural challenges remain.
In addition, a new package of expansionary fiscal measures is expected to support net wage growth and private consumption. Import demand is expected to remain strong.
Labour market improving, but challenges remain
In October, the unemployment rate fell to 8.2%, the lowest level since 2009. However, it remains above the European average, the Commission noted. “After peaking in the second quarter of 2024, job vacancy rates have decreased slightly, although they still point to a relatively tight labour market, particularly in the tourism and construction sectors.”
Employment is expected to continue to grow, but at a slower pace due to structural problems, such as skills shortages and low participation rates, especially among women. Wages per employee are expected to accelerate, with an average annual growth rate of 3.6% over the forecast period, due to increases in the minimum wage, reductions in social security contributions and the recently announced personal income tax reform.
Gradual de-escalation of inflation
Despite the decline recorded in inflation, due to the decrease in energy and services prices, the Commission estimated that strong demand and the “closed” labor market are expected to maintain upward pressures on consumer prices.
As a result, inflation is projected to decline only gradually, reaching 2.8% in 2025 and 2.3% in 2026. “While inflation excluding energy and food is expected to de-escalate, the projected increase in energy prices is expected to hold inflation at 2.4% in 2027.”
High primary surpluses
The general government budget surplus is expected to decline from 1.2% of GDP in 2024 to around 1.1% in 2025. This reflects a decline in the primary surplus from 4.7% to 4.3%, partly offset by lower interest expenditure. This decline is mainly due to measures (0.7% of GDP), including:
-a 1 percentage point reduction in social security contributions,
-public sector wage increases,
-rent allowance,
-a permanent annual allowance of 250 euros for vulnerable people.
Additional pressures come from higher spending on health and defence, as well as a fiscal correction related to European agricultural subsidies, equivalent to 0.2% of GDP. These effects are partially offset by increased revenues, supported by ongoing measures to strengthen tax compliance, the expansion of the digital work card to new sectors to reduce undeclared work, and higher local government fees.
