The economy of Greece will continue to grow at a “strong pace,” with 2.1% in 2025, 2.2% in 2026, and 1.7% in 2027, according to the autumn economic forecasts of the European Commission that were made public.

The growth rate of the Greek economy remains above the average of the Eurozone and the EU. For the Eurozone, the Commission forecasts growth of 1.3% in 2025, 1.2% in 2026, and 1.4% in 2027, while for the EU it forecasts growth of 1.4% for 2025 and 2026 and 1.5% for 2027.

The Commission’s figures for growth in the Eurozone and the EU in 2025 are revised upwards compared to the forecasts of last spring (from 0.9% and 1.1%, respectively). However, the Commission revises downwards its estimate for growth in Greece in 2025 compared to last spring (2.3%). For 2026, the forecast remains stable at 2.2%.

Inflation in Greece is expected to be 2.8% in 2025 and is projected to moderate to 2.3% in 2026 and 2.4% in 2027. In comparison, inflation in the Eurozone in 2025 is expected to be 2.1% and to moderate to 1.9% in 2026 and to 2% in 2026.

Unemployment in Greece in 2025 is at 9.3% and is expected to continue to decrease to 8.6% in 2026 and to 8.2% in 2027.

The fiscal surplus for Greece is expected to be 1.1% in 2025 and is projected to decrease to 0.3% in 2026 and to zero in 2027. In contrast, the Eurozone is recording a fiscal deficit of -3.2%, which is expected to reach -3.4% in 2027.

The public debt-to-GDP ratio in Greece is expected to decrease to 147.6% in 2025 and to further decrease, reaching 138% in 2027, thanks to strong nominal GDP growth and budget surpluses.

REPORT ON GREECE

In detail, the Commission’s report emphasizes that “the economy of Greece will continue to grow at a strong pace,” with projected growth of 2.1% in 2025 and 2.2% in 2026, supported by stable consumption and investments and through EU funds. Greece’s fiscal outlook remains favorable for the period 2025-27, with generally stable primary surpluses, despite tax cuts and social measures.

RESILIENCE DESPITE ADVERSE CONDITIONS

According to the Commission, the Greek economy “shows resilience despite adverse conditions.” In the first half of 2025, the economy of Greece grew by 2% year-on-year, mainly due to private consumption and tourism. Investments increased in the second quarter, particularly in construction and equipment. Overall, the economy is expected to maintain its growth momentum in the second half of 2025 and throughout 2026. Investment activity is expected to remain strong in 2025 and 2026, supported by double-digit growth in corporate loans and the implementation of the Recovery and Resilience Plan. Additionally, a new package of expansionary fiscal measures is expected to boost the growth of net wages and private consumption. Import demand is expected to remain strong, given the high import content of investments. Although a sharp impact is not expected, growth is projected to slow down after 2026 as the implementation of the RRP comes to an end.

GDP growth is expected to be relatively stable, with rates of 2.1% in 2025 and 2.2% in 2026, before moderating to 1.7% in 2027. While the economy has so far shown resilience to external challenges, a prolonged increase in geopolitical or trade uncertainty and financing costs could significantly affect exports, particularly in the tourism sector, and investment activity.

LABOR MARKET

Regarding the labor market in Greece, the Commission’s report notes that it continues to improve, but challenges remain. The unemployment rate fell to 8.2% in October 2025, its lowest level since 2009, but remains above the EU average. After peaking in the second quarter of 2024, job vacancy rates have slightly decreased, although they still indicate a relatively tight labor market, particularly in the tourism and construction sectors. Employment is expected to continue to increase, albeit at a slower pace due to structural issues, such as the skills gap and low participation rates, particularly among women. Wages per employee are expected to accelerate, with an average annual growth rate of 3.6% during the forecast period, partly due to previous increases in minimum wages, reductions in social security contributions, and the recently announced reform of personal income tax.

GRADUAL REDUCTION OF INFLATION

After averaging 3.1% in the first half of 2025, overall inflation fell to 1.7% by October, due to the decrease in energy and service inflation. However, strong demand and still tight labor market conditions are expected to maintain upward pressure on consumer prices. As a result, inflation is projected to decrease at a slow pace, reaching 2.8% in 2025 and 2.3% in 2026. While overall inflation excluding energy and food prices is expected to decrease, the projected increase in energy prices is expected to keep inflation at 2.4% in 2027.

STABLE FISCAL POSITION DESPITE EXPANSIONARY MEASURES

The nominal surplus of the general government is expected to decrease from 1.2% of GDP in 2024 to about 1.1% in 2025. This reflects a decrease in the primary surplus from 4.7% to 4.3%, which is partially offset by a reduction in interest expenses. According to the Commission, this decrease mainly stems from expansionary measures (0.7% of GDP), including a reduction in social security contributions by 1 percentage point, higher wages in the public sector, a rent refund based on income criteria, and a permanent annual allowance of 250 euros for vulnerable individuals. Additional pressures include higher healthcare and defense spending and a fiscal adjustment related to EU agricultural subsidies equivalent to 0.2% of GDP. These impacts are partially offset by increased revenues, which are supported by current tax compliance measures, the extension of the digital work card to new sectors to reduce undeclared work, and higher local government fees.

In 2026, the budget balance is projected to reach 0.3%, a decrease of 0.8 percentage points compared to 2025. This corresponds to a primary surplus of 3.4% of GDP. This decrease mainly reflects a recently announced expansionary fiscal package, which is estimated to cost 0.6% of GDP in 2026 and 0.8% of GDP in 2027. The package combines cuts in personal income tax, property tax, and VAT, along with targeted increases in pensions and public sector wages. These measures are designed to alleviate cost-of-living pressures and provide support to low- and middle-income households, families with children, retirees, and residents of small villages. The forecast also includes higher defense spending, which is expected to increase from 2.4% of GDP in 2025 to 2.6% in 2026.

In 2027, the nominal balance is projected to decrease to 0.0% of GDP, corresponding to a primary surplus of 3.2%. This deterioration of the nominal balance mainly reflects higher interest expenses and the impact of the new fiscal package throughout the year.

The public debt-to-GDP ratio was 154.2% in 2024, 55 percentage points below its peak in 2020. It is expected to decrease further, reaching 138% in 2027. The reduction is expected to be due to the increase in nominal GDP as well as the primary budget surpluses. (11/17/25)