The high-frequency indicators published to date on the performance of the Greek economy in the second quarter of 2026 send mixed signals, Eurobank notes in its analysis.
Overall, “soft” data suggest that the Greek economy maintained its resilience in the face of the geopolitical and energy shocks caused by the war in the Middle East. The “hard” data point to a mild slowdown in the annual economic growth rate compared to the 2.0% recorded in the first quarter.
However, it should be noted that the “hard” data for June—the month in which geopolitical tensions eased and energy prices fell—have not yet been published.
Already, according to preliminary estimates from the European Statistical Office (Eurostat), annual inflation in Greece fell to 3.9% in June, down from 4.9% in May. While this development is positive, it should not lead to complacency, as persistent and relatively high inflation has been a key feature of the Greek economy since the war in Ukraine and beyond.
In its recent Monetary Policy Report 2025–2026, the Bank of Greece (BoG) estimates that the real growth rate of the Greek economy will stand at 1.9% in 2026 and 2027, while it will accelerate marginally to 2.0% in 2028, up from 2.1% in 2025.
It forecasts that inflation will accelerate to 3.8% in 2026, up from 2.9% in 2025, and then ease to 2.6% and 2.3% in 2027 and 2028, respectively. At the same time, it notes that the recent interim agreement between the United States (U.S.) and Iran, combined with the decline in international oil prices, increases the likelihood of a slightly more favorable scenario for growth and inflation in the Greek economy in 2026.
The improvement in global economic conditions is also reflected in recent statements by President Christine Lagarde at the European Central Bank’s (ECB) annual conference in Sintra, Portugal. As she pointed out, upside risks to inflation and downside risks to growth are now more balanced compared to a few weeks earlier.
The results of the high-frequency indicators for the Greek economy published to date for the April–June 2026 period are summarized as follows:
- Economic Climate Index (IOBE): It averaged 107.4 points in the second quarter of 2026 (94.0 points in the Eurozone), compared with 106.7 points in the first quarter (see Figure 1.1). Despite the energy disruption caused by the war in the Persian Gulf, confidence indices in industry, retail trade, and construction improved, while the corresponding index for services remained at relatively high levels. In contrast, the consumer confidence index fell for the fifth consecutive quarter, to -53.2 points, reaching its lowest level in the past 15 quarters. Persistent pre-war inflation in the Persian Gulf and its subsequent acceleration explain, to some extent, the continued deterioration in consumer confidence.
- Manufacturing PMI (S&P Global): Averaged 53.2 points in the second quarter of 2026 (51.7 points in the Eurozone), compared to 54.4 points in the first quarter, remaining above the 50-point threshold and indicating a continued improvement in operating conditions in the manufacturing sector for the 14th consecutive quarter.
- Employment (ELSTAT): According to ELSTAT’s monthly Labor Force Survey, the annual rate of employment growth slowed to 0.4% in April–May 2026, down from 1.2% in the first quarter. This development is an indication of a slowdown in economic activity during the second quarter.
- For many years now, employment has been the main driver of growth in Greece’s real Gross Domestic Product (GDP), while the contribution of labor productivity remains limited. However, sustaining this growth model in the long term faces significant constraints due to demographic decline and the resulting reduction in the labor force.
- Retail Trade (ELSTAT): The retail trade volume index, a statistic that measures sales volume, fell in April 2026 by 1.4% on a monthly basis and by 0.1% on an annual basis. The product categories that recorded a decline in sales compared to March were as follows: automotive fuels and lubricants (-5.5%), books, stationery, and other goods (-4.5%), food, beverages, and tobacco (-2.1%), and clothing and footwear (-2.1%). The rise in inflation during the second quarter poses downside risks to the growth rate of private consumption.
- Industrial Production (ELSTAT): The industrial production index fell by 3.5% on a monthly basis in April 2026, compared with a 1.4% increase in March, while on an annual basis it continued to rise, albeit at a slower pace (2.7%). Of the four individual industrial sectors, the largest monthly decline in production was recorded in electricity supply (-18.4%), followed by water supply (-2.0%), manufacturing (-1.8%), and mining and quarrying (-0.5%).
- External Sector (Bank of Greece): Exports of goods and tourism receipts continued their upward trend in April 2026. The former rose by 13.6% year-over-year at constant prices (5.5% excluding fuels), while the latter increased by 9.6% at current prices.
- Private-sector financing (Bank of Greece): The annual growth rate of private sector financing by domestic Monetary and Financial Institutions (MFIs) remained at high levels, standing at 7.1% during the two-month period of April–May 2026, compared to 7.6% in the first quarter of the year. The ongoing credit expansion, combined with resources from the Recovery and Resilience Facility (RRF) and the consolidation of fiscal discipline and financial stability that characterizes the Greek economy, are contributing positively to the strengthening of investment.
Overall, the high-frequency indicators available to date suggest that the Greek economy maintained its resilience during the second quarter of 2026, despite significant geopolitical and energy-related uncertainty. However, the slowdown observed in certain “hard” indicators, combined with inflation remaining at relatively high levels, increases the likelihood of milder economic growth compared to the previous quarter.
At the same time, the easing of geopolitical tensions and international energy prices since mid-June is creating conditions for a gradual improvement in the macroeconomic environment during the second half of the year.