Price pressures in 2026 are not affecting every part of the economy equally. For the public finances, rising prices have coincided with a sharp increase in VAT receipts and a faster decline in the debt-to-GDP ratio. For households, they have come with almost no increase in real pay and a slowdown in consumer spending.
That is the picture presented in the autumn 2026 report by the Hellenic Fiscal Council (HFC), which brings together data from ELSTAT, the finance ministry and international organisations.
Energy back in focus
Average harmonised inflation stood at 3.6% in the eight months from January to August, compared with 3.2% in the same period of 2025. It peaked at 4.9% in May before easing to 3.7% in August (today, Eurostat announced inflation of 5.6% for Greece in October).
Core inflation, excluding energy, food, alcoholic beverages and tobacco, stood at 3.2%. In other words, price increases are not confined to energy and food.
The starting point, however, is energy. Following an escalation of tensions in the Middle East, energy prices in Greece rose by an average of 10.6% over the eight-month period, compared with 6.6% in the eurozone. The annual increase reached 21.6% in April and was still 15.4% in August.
Price pressures are widespread. In August, the category “Housing, water, electricity, gas and other fuels”, which also includes other housing and water supply costs, rose by 9.5%. Prices for restaurant and accommodation services increased by 8.1%, a trend the HFC partly links to strong tourist demand. Services overall became 4.5% more expensive. In upward revisions to its forecasts, the Council identifies both energy and housing costs as drivers.
The finance ministry raised its inflation forecast for 2026 in October, from 3.2% to 3.6%. Forecasts from other institutions are higher: the European Commission (May) projects 3.7%, the Bank of Greece 3.8%, and the OECD (June) and the IMF (October) 4.2%. The IMF puts inflation at 3.6% in 2027, compared with 2.4% in the Draft Budget. Meanwhile, the ECB raised interest rates twice, in June and September, taking its deposit rate to 2.50%.
VAT receipts surge
VAT receipts in the first half of the year totalled €14.58bn, up €1.69bn (13.1%) year on year, and exceeded the target by €879m. They were the main source of the outperformance in tax revenues, which were €1.03bn above target overall.
These gross figures, however, include one-off revenues. Tax receipts include about €0.3bn in VAT from the concession agreement for the Egnatia Odos, which was matched by an equal tax refund, as well as €135m from the second instalment for the concession of the Casino at Ellinikon. Excluding these amounts, tax revenues exceeded the target by just €0.58bn.
The HFC attributes the favourable fiscal outcome mainly to economic growth and improved tax compliance, noting that tax evasion has fallen, particularly in consumption taxes. Higher prices widen the nominal tax base, but are not the main explanation.
Measures and fiscal headroom
Emergency energy measures in 2026 amount to about €670m, chiefly a subsidy for diesel fuel (€216m), one-off support for families with children (€232m) and the Fuel Pass (€113m). They account for a small part of the year’s total fiscal interventions, which amount to €4.1bn. For 2027, energy adjustment measures worth 0.2% of GDP are planned through the expanded national escape clause, along with an additional €200m allocation for possible energy cost subsidies in the first months of the year.
There is already little room for more. Net primary expenditure is rising by 8% this year, against a recommended ceiling of 3.6%, and by a cumulative 10.8% over 2024–2026, against a ceiling of 10.3%. Even after allowing for the national escape clause for defence and energy, the balance in the enhanced control account is close to zero.
Wages stagnate, consumption slows
For households, the balance is negative. Based on the European Commission’s spring forecasts, real employee compensation rose by just 0.1% in 2025, compared with a 1.8% increase in the eurozone. Growth of 0.1% is forecast again for 2026, against 0.2% in the eurozone. The picture was reversed in 2024, when Greece recorded growth of 3.6%, compared with 2.1%. For 2027, the Commission expects a recovery to 1.8%, against 0.8% in the eurozone.
The impact is visible in consumption, the largest component of GDP, accounting for about two-thirds of the total. Private consumption rose by 0.9% in the first half of 2026, down from 1.5% in the same period last year and 1.7% for 2025 as a whole. The Commission says rising energy prices are reducing real disposable income and slowing consumption, despite support measures. The OECD is more optimistic, estimating that employment, tax cuts and income-support measures will underpin consumption.
The Draft Budget forecasts private consumption growth of 1.4% in 2026 and 1.5% in 2027, based on increases in disposable income, the labour market and fiscal measures. To meet the annual target, consumption will need to accelerate to a rate close to 2% in the second half of the year.
The HFC describes the combination of fiscal stability and support measures as “virtuous”, attributing it mainly to economic growth, improved tax compliance and credit rating upgrades. The primary surplus is estimated at 3.6% of GDP this year and 3.3% in 2027. Some of the decline in the debt ratio, however, is being driven by rising prices, even as real incomes remain flat.
The Council’s warning concerns how long the shock lasts: if energy prices remain high, costs could feed through more broadly into prices and lead to persistent inflation. In such a scenario, pressure on consumption and borrowing costs would be difficult to avoid.
In this environment, the HFC concludes, keeping net primary expenditure within the limits of the fiscal framework is essential to preserving the fiscal headroom needed to support the most vulnerable households and businesses.