BoG sees Greek inflation above Eurozone level in 2026

In its Inflation Report, the central bank projects that the Consumer Price Index in Greece will stand at 3.8% in 2026, compared with 3.0% in the Eurozone, with the main driver being the sharp increase in energy costs.

For 2027, the Bank of Greece estimates that inflationary pressures will ease significantly, with headline inflation falling to 2.6% in Greece and 2.3% in the Eurozone, as the impact of rising energy commodity prices fades.

Central bank economists attribute the significant divergence between Greece and the Eurozone primarily to energy price developments. As noted in the report, “energy inflationary pressure in Greece over the past two months has been roughly twice the Eurozone average, mainly due to the historically stronger adjustment of energy inflation in Greece compared with the Eurozone.”

According to the Bank of Greece projections, energy inflation is expected to surge to 11.1% in 2026, compared with 8.4% in the Eurozone, reflecting sharp increases in energy product prices. In 2027, a marked slowdown is forecast, with energy inflation declining to 1.0%, due to a favourable base effect and the expected easing of international energy prices.

At the same time, the Bank of Greece estimates that the implementation of the new European Emissions Trading System (ETS2) will exert additional upward pressure on energy prices from 2028, pushing energy inflation to 2.4%.

Recent data confirm the persistence of strong inflationary pressures. In May, the Harmonised Index of Consumer Prices (HICP) stood at 4.9% in Greece, significantly higher than the Eurozone average of 3.2%, according to preliminary estimates. In the same period, inflation in the United States reached 4.2%, marking the third consecutive month in which the effects of the war have been reflected in consumer prices, mainly through energy and commodities.

The Bank of Greece forecasts highlight the decisive role of energy costs in inflation dynamics over the coming years, while also underscoring the greater sensitivity of the Greek economy to fluctuations in international energy markets compared with the Eurozone average.