The European Commission predicts that the growth momentum of the Greek economy will continue through 2027, with growth slowing from 2.1% in 2025 to 1.8% in 2026 and 1.6% in 2027, mainly due to the energy crisis. At the same time, primary surpluses above 3% of GDP and a significant reduction in debt are expected.
- By Tasos Dasopoulos
In its spring forecasts, the Commission emphasizes that Greece’s economic growth will remain above the European average until 2027. This is attributed to the completion of projects under the Recovery and Resilience Facility and the tax relief measures implemented since the beginning of the year. The Commission also forecasts a decline in unemployment, reaching 8.3% in 2026 and 7.9% in 2027.
However, regarding inflation, it is expected to rise from 2.9% in 2025 to 3.7% this year, mainly due to energy prices, before falling back to 2.4% in 2027.
On fiscal matters, the general government balance recorded a surplus of 1.7% of GDP in 2025, exceeding the Commission’s forecast of 1.1%. This positive development is due to lower expenditures and higher tax revenues, mainly from VAT, supported by improved tax compliance.
For 2026, the Commission expects a surplus of 0.8% of GDP, incorporating expansionary measures estimated at 0.6% of GDP in 2026 and 0.8% permanently from 2027 onwards. These measures include tax cuts, increases in pensions and public sector wages, as well as temporary energy support measures amounting to 0.2% of GDP. They target households, transportation, and agriculture, including fuel subsidies and one-off allowances for families with children. Meanwhile, recent changes, such as the increase in pensioners’ allowances, are estimated to carry a fiscal cost of about 0.1% of GDP. Defense spending is expected to rise from 2.4% of GDP in 2025 to 2.6% in 2026.
The primary surplus is expected to reach 3.4% of GDP this year, down from 4.9% in 2025 and 3.2% in 2027.
Finally, the public debt-to-GDP ratio declined to 146.1% in 2025, nearly 43 percentage points below its 2018 peak, and is expected to reach 140.7% this year and 134.4% in 2027.
