The government in Greece submitted its 2026 draft budget plan to parliament on Monday, in which it forecasts economic growth of 2.4% in 2026 – outperforming Europe’s major economies – due to higher investments, strong tourism receipts and domestic demand.
The most striking feature of the new budget is its aggressive push for financial independence, moving further away from the crisis era:
The public debt-to-GDP ratio is projected to plummet to 137.6% in 2026 (down from 145.4% in 2025). This milestone figure is lower than the 147.8% recorded in 2010 when Greece was forced to seek its first international bailout.
Utilizing primary surpluses and cash reserves, the government is committed to the early repayment of loans from the first bailout—the Greek Loan Facility (GLF) bilateral loans—to fully settle these debts before their 2031 deadline.
This aggressive strategy is underpinned by continued fiscal discipline, maintaining high primary surpluses and reinforcing international investor confidence.
The engine of growth in Greece
Presenting the draft budget in Parliament on Monday, Economy and Finance Minister Kyriakos Pierrakakis confirmed that the projected growth will be fueled by:
- Investment Boom: Total investments are set to surge by 10.2%, up sharply from 5.7% in 2025, signaling high business confidence and capital injection.
- Historic Low Unemployment: The budget projects the unemployment rate will fall to 8.6%, the lowest level achieved since the 2008 financial crisis.
- Stable Pricing: Inflation is expected to ease to 2.2 percent on average, from 2.6 percent this year and 2.7 percent in 2024, while unemployment is projected to fall to 8.6 percent, from 9.1 percent this year and 10.1 percent last year.
