Greece’s Growth Set to Ease as External Pressures Mount

Greece’s economical enlargement is expected to mean slightly successful the coming years, arsenic geopolitical tensions successful the Middle East weigh connected user spending and fiscal support from EU funds gradually tapers off, according to EY’s latest European Economic Outlook.

Economic enactment successful 2025 remained resilient, with GDP rising 2.5% successful the last 4th and yearly maturation reaching 2.1%. The enlargement was broad-based, supported by backstage consumption, investment, and exports, signaling a gradual displacement toward a much balanced maturation model. Household spending was bolstered by rising employment and incomes, reflecting continued labour marketplace normalization.

Inflation, while supra target, stayed comparatively stable passim the year, averaging 2.5% and ranging betwixt 1.9% and 3.1%. Price pressures were driven chiefly by services and food, while little vigor costs helped incorporate wide inflation. In February 2026, ostentation ticked up to 2.7% year-on-year, arsenic increases successful nutrient and hospitality prices outweighed the dampening effect of cheaper energy.

Outlook for the Greek Economy

GDP maturation is projected to clasp steady astatine 2.1% successful 2026, remaining supra the eurozone average, with investment—driven by ongoing NextGenerationEU (NGEU)-funded projects—acting arsenic the main motor of expansion. Private depletion is expected to easiness slightly arsenic the Middle East struggle pushes up prices, while the investment-led signifier of maturation will apt boost imports, limiting the publication of nett exports contempt stable export performance.

From 2027 onward, maturation is acceptable to gradually normalize arsenic concern momentum softens with the completion of NGEU programs. Still, Greece’s improving fiscal presumption is expected to make country for targeted measures to cushion vigor costs for households and businesses, support home demand, and co-finance caller investments, helping offset the slowdown successful EU-funded activity.

Inflation is forecast to emergence to astir 3.0% successful 2026, mostly owed to higher vigor prices linked to geopolitical tensions. Although halfway ostentation is expected to ease, it will apt stay supra 2% amid persistent pressures successful services.

A reversal successful vigor terms shocks should bring ostentation down to 2% successful 2027, albeit temporarily, earlier it picks up again successful 2028, chiefly owed to higher vigor costs associated with the rollout of the EU’s Emissions Trading System 2 (ETS2).

Source: tovima.com