Greece’s economy is expected to remain resilient, with GDP growing by 2 percent in 2025 and 2.1 percent in 2026, thanks to investments from the Recovery Fund and an increase in the minimum wage and disposable income that will support consumption, according to an OECD report (Economic Outlook).
The OECD noted that disbursements of grants and loans from the Recovery and Resilience Fund are expected to increase from 1.8 percent of GDP in 2024 to 3.6 percent in 2026, while private consumption is expected to grow by 1.2 percent this year and 1.7 percent in 2026.
Exports are expected to slow, along with a slowdown in demand from abroad, mainly from European Union countries, due to US tariffs.
Greece’s GDP to grow faster than Europe’s, OECD says
For the Eurozone, GDP is forecast to grow by 1 percent this year and 1.2 percent in 2026, compared to 0.8 percent GDP growth last year. For the global economy, the OECD forecasts a significant slowdown in growth to 2.9 percent both this year and in 2026, from 3.3 percent in 2024.
The OECD underlined that the Greek economy remains strong, with business expectations in the manufacturing and services sectors having declined in April but continuing to indicate a growth path.
It added that any delays in the absorption of the Recovery Fund resources for investment, excessive wage growth or a recurrence of extreme weather phenomena could worsen the economic outlook.
Regarding wages, it said that if their increase continues to consistently outpace productivity growth, this could further weaken exports.
Inflation (based on the Harmonised Index of Consumer Prices) is expected to decline to 2.5 percent this year and further to 2 percent in 2026, thanks to lower oil prices, despite rising trade costs and persistent price increases in the services sector.
Significant primary budget surpluses are projected for 2025 and 2026, at 2.1 percent and 2.2 percent of GDP, respectively, supported by improved tax compliance.
“Maintaining public debt on a steady downward path should remain a priority, as the costs of an ageing population and investment needs increase future spending pressures,” the report highlighted.
Greece aims to reduce debt
Greece aims to accelerate its debt reduction strategy, slashing roughly 20 percentage points off its debt-to-GDP ratio over the next four years.
Greece’s finance ministry has committed to early repayment of some $8 billion in bilateral debt in 2026, 2027, and 2028, estimating that this would push down the country’s debt-to-GDP ratio – Europe’s highest – from 162 percent in 2024 to 149 percent in 2025 and 133.4 percent by 2028.
The International Monetary Fund (IMF) forecasts that Greece’s public debt, which includes deferred interest from institutional bailout loans, will ease to 139.4 percent by 2029—a decrease of nearly 30 percentage points.
Analysts from the credit rating agency Scope are even more optimistic, projecting the debt-to-GDP ratio to fall to 132.8 percent by 2029. Based on Scope’s forecast, Greece could hand over the “red light” of the EU’s highest public debt percentage to Italy by 2028.
Related: Greece 2025 Budget: Strong Growth, Increase in Investment