Firmly on the “line” in favor of targeted and not horizontal measures, in order to ease the pressures on households, the self-employed and businesses from the intensifying energy crisis, the Parliamentary Budget Office at the Hellenic Parliament (SPBO) is moving, warning of the major risk of the ineffectiveness of horizontal measures and, by extension, fiscal derailment.
Presenting the quarterly report (September 2026), the head of the Office, Professor Ioannis Tsoukalas, explained that horizontal tax cuts (VAT, Excise Duties, etc.) do not have the same effectiveness as targeted measures, characteristically underlining that: “fiscal prudence is the be-all and end-all in the current juncture”.
The country has maintained fiscal stability, Mr. Tsoukalas added, stressing that: “there is no fiscal room to cover the energy tsunami that is underway”.
The head of the SPBO also declares his opposition to the policy of repeated escape clauses (energy, defense, etc.) followed by the European Commission, putting forward the argument that repeating the same practice leads to a loss of the credibility of the European Union itself, which should invent another mix, another mechanism to get out of the “vertigo” in which it has found itself.
Asked about the effects of the energy crisis on the economy, and specifically on prices and inflation, Mr. Tsoukalas, after expressing the assessment that: “the problem with energy is not temporary, but will remain for years” described every forecast for the course of the cost-of-living index this year as “risky”.
“I do not see how we can close below 3.2% this year” he noted and himself raised the question of how far above 3% the index will be.
Especially for food inflation he said that: “conditions are not ideal for these either”.
Mr. Tsoukalas in fact did not attempt any forecast for the course of inflation in 2027.
It is noted that inflation rose in August 2026 to 3.7%, remaining higher than the Eurozone average (3.2%) and according to the report: “the persistence of this divergence continues to be a source of concern, as it erodes the international competitiveness of the Greek economy and burdens the Current Account Balance”.
Growth
Otherwise, the SPBO notes in its quarterly report that: the Greek economy continues to grow at a rate clearly higher than the Eurozone average, as GDP recorded an increase of 1.9% in the second quarter of 2026 compared with the second quarter of 2025, while the corresponding figure in the Eurozone is 1.2%.
The Office’s baseline estimate for the growth rate of the economy this year remains at 1.9%, with a forecast range from 1.7% to 2.0%.
The report also states that:
The rekindling of geopolitical conflicts in the Middle East brought back heightened uncertainty about the duration of the crisis in the region and about the normalization of energy flows through the Strait of Hormuz. As a result, the energy price curve remains significantly higher than pre-conflict levels and the easing of inflation has been halted. In this context, the European Central Bank again raised its key interest rates in September, following the corresponding increase in June. Despite these adverse conditions, the global and European economies have shown greater resilience to the energy shock than was initially estimated.
The credit rating of the Hellenic Republic improved further as international agencies either upgraded its outlook to positive or proceeded to rate the country at a higher grade.
The Consolidated Primary Balance of General Government with adjustments records a surplus of 11,302 million euros (4.3% of GDP), increased by 1,995 million euros compared with the corresponding seven-month period of 2025.
VAT revenues show an increase of 2,037 million euros, due partly to the significant rise in travel receipts and partly to the rise in private consumption at current prices. On the expenditure side of the State Budget, an increase of 4,916 million euros is observed compared with the corresponding seven-month period of 2025, which is attributed to the increase in primary expenditure by 3,190 million euros and the increase in PIP and RRF expenditure by 1,471 million euros.
The seasonally adjusted unemployment rate in the second quarter of 2026 amounted to 8.3% compared with 9.0% in the same quarter of the previous year. The number of unemployed in the second quarter of 2026 amounted to 394 thousand persons, reduced by 34 thousand persons compared with the second quarter of 2025 (a decrease of 7.9%).