GDP growth is projected to remain strong, at 1.9% in 2026 and 2.0% in 2027, the OECD notes in its report on Greece.
Disbursements from the Recovery and Resilience Facility will support investment, while gains in employment, reductions in personal income taxes, and energy support measures will boost consumption, despite high energy prices.
Exports are projected to accelerate in the second half of 2026 as global demand improves. Headline inflation will rise to 4.2% in 2026 due to higher energy prices, before falling to 2.6% in 2027.
Risks to growth are balanced, provided that energy production and exports in the Middle East recover from the third quarter onward, as assumed in the baseline scenario.
A stronger-than-expected expansion of tourism could boost growth, while delays in the implementation of European funds or prolonged disruptions in energy markets could weigh on the outlook.
Significant primary budget surpluses are projected for the 2026–27 period. Prudent fiscal policy and rapid debt reduction should remain a priority, as the challenges arising from population aging and investment needs will remain high.
Continued efforts to reduce tax evasion will create additional fiscal space to boost spending on education and healthcare.
Recent support measures to counter rising energy prices should be phased out rapidly as price pressures ease. Further simplification of licensing and approval procedures for investments in renewable energy sources would help reduce dependence on fossil fuels.
Growth remains strong
The economy grew by 2.1% in 2025, driven by investment, private consumption, and net exports. High-frequency indicators continued to point to expansion in early 2026, but confidence indicators deteriorated in April 2026, particularly among consumers and in the industrial sector.
The unemployment rate fell in 2025 but rose in the first months of 2026. Labor market tightness remains high, particularly in construction, despite signs of easing in other sectors.
Inflation rose to 4.6% in April 2026, driven by rising energy prices and persistent inflation in food and services. Real wage growth remained resilient, while minimum wages rose by 4.5% in April 2026.
The annual growth rate of credit to the private sector stood at 7.6% in March 2026, supported by robust credit expansion to non-financial corporations and the ongoing recovery in household borrowing.
Tourism growth remained strong, with international tourist arrivals continuing to rise and booking rates remaining generally stable in early 2026.
The effects of the ongoing conflict in the Middle East are beginning to become apparent. Weighted average wholesale electricity prices (EUR/MWh) rose by 16% from February to April.
The partial closure of the Strait of Hormuz is also affecting service exports and energy imports. Although Greek shipowners account for approximately 20% of global capacity, mainly in bulk carriers and oil tankers, past disruptions have led to increased demand.
Net energy imports, particularly of oil and natural gas, accounted for 93% of total energy supply, making Greece’s external position particularly vulnerable to disruptions in international energy markets.
Public debt will continue to decline
High primary fiscal surpluses are projected, amounting to 2.6% of GDP in 2026 and 2.7% of GDP in 2027, following a historically high surplus of 4.4% of GDP in 2025, with an estimated fiscal tightening of 0.4% of GDP between 2025 and 2027. Public debt will decline to 129.8% of GDP in 2027.
The new fiscal measures amount to 0.8% of GDP in 2026 and 1.0% of GDP in 2027, reflecting mainly reforms to personal income tax for workers, retirees, farmers, the self-employed, and families, as well as increased spending on defense and security.
Defense spending will increase by 0.2% of GDP from 2025 to 2026. Disbursements from the Recovery and Resilience Facility will rise from 2.6% of GDP in 2025 to 4.4% of GDP in 2026, before being phased out.
The temporary support measures to mitigate high energy prices, which were introduced in March 2026 and are expected to last until September 2026, include non-targeted price subsidies for diesel, as well as targeted road transport fuel subsidies and income support for low-income households. Minimum wage increases in 2027 will further boost household incomes.
Growth will remain resilient
GDP growth is projected to remain resilient, at 1.9% in 2026 and 2.0% in 2027. Rising disposable incomes, supported by continued employment growth and fiscal support, will boost consumption. Investment growth is projected to slow in 2027, due to the phased withdrawal of Recovery and Resilience Facility resources.
Export growth will gradually accelerate as external demand strengthens. Headline inflation is projected to reach 4.2% in 2026, driven by higher international energy prices, and to ease to 2.6% in 2027 as the energy shock subsides, while inflation in services will remain elevated.
Risks to growth are balanced, provided that energy production and exports in the Middle East gradually recover from the second half of 2026 onwards. Upside risks stem from stronger-than-expected tourism performance, while delays in the absorption of European funds or prolonged disruptions in energy markets would weigh on the outlook.
Accelerating the energy transition would reduce dependence on fossil fuels
Maintaining a rapidly declining public debt-to-GDP ratio remains critical, given the still-high level of debt and the increased fiscal pressures stemming from climate change and population aging.
Curbing tax expenditures and continuing measures against tax evasion would create additional fiscal space. Strong and sustainable growth will be required to raise living standards while reducing debt.
Continued efforts to streamline business regulations, removing restrictions on professional services, and reorienting labor market policies toward high-quality training and counseling would boost competition and investment, improve labor productivity, and reduce skill mismatches.
Greece has made significant progress in increasing its renewable energy capacity, but dependence on fossil fuels remains high, particularly in transportation and housing.
Facilitating investment in renewable energy capacity through further simplification and streamlining of permitting procedures would help accelerate the reduction of emissions and strengthen energy security.
Additional targeted financial support for energy-efficient renovations and electric vehicles would also boost investments toward the phasing out of fossil fuels in the transport and housing sectors.