Slightly downward, to 1.9%, from 2% in its previous report, the State Budget Office in Parliament (GPKB) revises its forecast for growth in the current year, with a forecast range from 1.7% to 2.1%.
As stated in the June quarterly report, which was presented today by the head of the Office, Ioannis Tsoukalas, disruptions in energy markets—mainly through the Strait of Hormuz—accelerated inflation and slowed growth at the global and European level.
Compared with the 2021–2022 energy crisis, the current disruption is considered milder, due to reduced European dependence on fossil fuels and its diffusion through internationally traded goods.
With the apparent de-escalation, the forecasts of international organizations (OECD, IMF, European Commission) converge on a slowdown in growth for 2026 and a partial recovery in 2027, on the condition of relatively rapid normalization of energy markets. Uncertainty remains high, while fiscal interventions are recommended to be targeted and temporary.
It is characteristically noted: “although the crisis has entered a phase of easing, uncertainty remains elevated regarding international trade, energy markets, economic growth, and inflation. Under these conditions, the Office slightly revises downward its baseline estimate for the growth rate of the Greek economy in 2026, to 1.9%, from 2.% in the March 2026 Report, with a forecast range from 1.7% to 2.1%.”
Inflation
Regarding inflation, the report notes that in May 2026 it rose to 4.9%, remaining noticeably higher than the Eurozone average (3.2%).
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.
Noteworthy is the downward course of food inflation in Greece (including tobacco and alcohol) in recent months (from 4.3% in February 2026), which stood at 2.6% in May 2026, from 2.4% in May 2025. Food inflation in the Eurozone stood at 1.9% and has remained steadily lower than the Greek rate since November of the previous year.
More generally regarding the prospects of the Greek economy, the GPKB states that:
- After the completion of the Recovery and Resilience Facility (RRF), the utilization of all available European resources, and additionally the attraction of alternative financing methods for investments in cutting-edge technologies, becomes critical.
- The acceleration of the administration of justice and the strengthening of competition in markets remain, according to the Commission, major priorities for maintaining growth momentum. Fiscal stability and the predictability of economic policy constitute a competitive advantage for the Greek economy, especially in an unstable international geoeconomic environment, and are a necessary condition for attracting investment.
- The broadening of the tax base through strengthening tax compliance remains equally important for creating fiscal space.
- Additional fiscal space should be used with prudence and directed as a matter of priority to policies that strengthen the country’s long-term growth momentum. Such policies include reducing the cost of salaried labor, so as to strengthen incentives for participation in the labor market, as well as tax incentives to accelerate depreciation of investment plans in sectors of high added value with export prospects. These interventions can, in combination, help address two key structural weaknesses of the Greek economy: low labor productivity and dependence on sectors of low added value.
Housing
Regarding the housing problem in Greece, the report includes a special study from which it emerges that the issue is not exclusively a matter of insufficient new construction activity, but also a matter of utilization, distribution, and functional availability of the existing stock.
In this direction, the Office highlights as critical interventions the acceleration of resolving inheritance and cadastral pending issues, the provision of tax incentives for long-term leases, the targeted regulation of short-term rentals in high-pressure areas, support for renovations under conditions of reintegration into the long-term market, and complementary investments, through public-private partnership, in social and affordable housing.
The Office estimates that:
- During the period 2018-2025, the reduced actual availability of the existing stock is associated with an increase in real housing prices of up to 19.1%.
- The percentage of vacant homes gradually returns, over a six-year horizon, to the lowest levels recorded in 2001.
Such an increase in the real supply of housing could exert significant downward pressure on real prices, leading to a reduction of about 15.5%–24.6%, depending on the individual assumptions of the simulation.