The European Commission has revised upwards its forecast for Greece’s growth in 2024. From 2.1% projected last autumn, GDP growth for 2024 is now expected to reach 2.3%, according to the Commission.
For 2025 and 2026, the Commission’s forecast remains unchanged from its autumn estimates. GDP growth in Greece is expected to reach 2.3% in 2025 and 2.2% in 2026, “thanks to sustained consumption and an increase in EU-funded investments.”
However, the Commission has revised downward its forecasts for growth in the eurozone and the EU for 2025 and 2026 compared to the Autumn Forecasts. The Commission estimates GDP growth in the eurozone at 0.9% for 2024 and 1.0% for the EU. For 2025, GDP is projected to grow by 0.9% in the eurozone and 1.1% in the EU, and in 2026 by 1.4% and 1.5%, respectively. (In autumn, the Commission forecast 1.3% growth for the eurozone and 1.5% for the EU in 2025, and 1.6% and 1.8% respectively for 2026).
Inflation in Greece is estimated at 3% in 2024 and is expected to ease to 2.8% in 2025 and 2.3% in 2026, “with strong wage developments and demand continuing to put upward pressure on consumer prices.” Inflation in the eurozone is expected to stand at 2.4% in 2024 and ease to 2.1% in 2025 and 1.7% in 2026.
Unemployment in Greece is at 10.1% in 2024 and is expected to continue declining to 9.3% in 2025 and 8.7% in 2026.
“Greece Achieved a Significant Fiscal Surplus in 2024,” the Commission Notes
In 2024, the general government balance recorded a surplus of 1.3% of GDP. In 2025, the general government surplus is expected to decline to 0.7% of GDP and increase again to 1.4% of GDP in 2026. Supported by strong nominal GDP growth, the debt-to-GDP ratio continues to decline and is expected to reach 140.6% in 2026.
Report on Greece
More specifically, the Commission’s report on Greece emphasizes that “the Greek economy maintains its momentum despite headwinds.”
In 2024, the Greek economy grew by 2.3%. According to the Commission, this was largely driven by private consumption, investment, and inventory accumulation. Despite a restrictive fiscal policy, domestic demand growth was strong and led to a significant increase in imports, while exports grew at a slower pace. As a result, net exports weighed on economic activity.
As the Recovery and Resilience Plan progresses, EU-funded investments are expected to be significant in 2025 and 2026. Along with sustained strong consumption, supported by steady income growth, these are expected to be the main drivers of economic growth. Import demand is expected to remain strong due to the high import content of investment. Overall, GDP growth is expected to continue exceeding its long-term potential, at rates of 2.3% in 2025 and 2.2% in 2026.
According to the Commission, the Greek economy is expected to be only slightly affected by US tariffs, due to relatively weak direct and indirect trade links with the United States. However, downside risks to the growth outlook have increased, as persistent trade slowdowns and geopolitical uncertainty, combined with deteriorating global economic prospects, could negatively affect Greek exports, especially tourism.
Tighter Labor Market and Sustainable Wage Growth
The labor market has improved in recent years, and the positive momentum continued into early 2025, according to the Commission. After peaking in Q1 2024, job vacancy rates have begun to decline, but still indicate a tight labor market, especially in tourism-related sectors and those requiring high skills.
Employment is expected to continue expanding, although at a slower pace, as skill mismatches and low labor force participation—especially among women—constrain labor supply. Against this backdrop, real wages per worker are expected to rise further, averaging 1.3% annually over the forecast horizon. This is also supported by recent increases in minimum wages and reductions in social security contributions.
Inflation Will Remain Above the Eurozone Average
Headline inflation averaged 3% in 2024, 0.6 percentage points above the eurozone average. The disinflation process has been limited by accelerating service prices and rising electricity costs. Looking ahead, wages are expected to continue putting upward pressure on prices. As a result, services inflation is expected to slow only gradually over the forecast horizon.
Overall, inflation is forecast at 2.8% in 2025 and 2.3% in 2026. Core inflation (excluding energy and food) is expected to remain higher, at 3.5% in 2025 and 2.6% in 2026.
Stronger Fiscal Prospects Due to Structural Reforms
In 2024, the general government balance significantly exceeded expectations, recording a surplus of 1.3% of GDP, compared to a forecasted deficit of 0.6% in the Autumn Forecast. According to the Commission, this improvement was due to subdued current spending growth, higher-than-expected revenues from direct taxes, and strong social security contributions—driven not only by employment growth but also by measures to combat tax evasion and undeclared work, such as the digital labor card and stricter VAT reporting requirements.
In 2025, the general government surplus is expected to fall to 0.7% of GDP. On the revenue side, the forecast reflects a higher baseline due to stronger-than-expected performance in 2024 and factors in the increase in the hotel overnight stay tax, structural anti-tax evasion measures, and the extension of the digital labor card to the food and tourism sectors, aiming to reduce undeclared work. It also includes the increase in municipal fees. These measures are expected to offset the effects of a 1 percentage point cut in social security contribution rates and public sector wage increases.
On the expenditure side, forecasts incorporate a new policy package worth 0.5% of GDP announced after the release of 2024 fiscal results. This includes the introduction of a monthly rent subsidy based on income criteria, a permanent €250 social benefit for low-income pensioners, uninsured elderly, and people with disabilities, and an annual €500 million increase in the national public investment budget.
In 2026, the general government surplus is projected to rise to 1.4% of GDP under a no-policy-change assumption. This improvement is expected to be supported by continued increases in tax and social security revenues, which are expected to offset rising pension and public sector wage costs. Fiscal policy is projected to remain expansionary, supported by EU funding, in both 2025 and 2026.
The public debt-to-GDP ratio is projected to continue declining to 146.6% in 2025 and 140.6% in 2026. This reduction is due to rising nominal GDP and budget surpluses.
