Athens, Greece. The International Monetary Fund said Greece’s economic growth remains robust, supported by strong domestic demand and ongoing reforms under Next Generation EU. It said risks linked to the conflict in the Middle East continue to cloud the outlook.
Growth outlook and external risks
The IMF said Greece is well positioned to cope with external shocks as public sector balance sheets continue to strengthen, reflected in the rapid decline in the debt-to-GDP ratio.
Fiscal policy and policy mix
The Fund said fiscal policy is shifting to support household purchasing power and housing affordability while maintaining a balance between growth and prudence. It added that the appropriate policy mix should focus on growth-friendly but prudent fiscal policy, alongside financial system resilience and structural reforms.
Reform priorities
The IMF said structural reforms are needed to address low investment, weak productivity growth and adverse demographic trends that continue to weigh on the economy.
Recent economic indicators
The IMF reported that economic growth remained strong in 2025, with real GDP expanding by 2.1% year on year, driven by accelerated investment projects funded by NGEU and strong private consumption. It noted that tourism reached a record level and the unemployment rate declined to 8.3% in the fourth quarter of 2025, close to pre-global financial crisis levels.
Inflation and external balance
The IMF said inflation remained persistent at 3.1% in February 2026, reflecting a positive output gap. It also reported that the current account deficit narrowed to 5.7% of GDP in 2025, supported by improved terms of trade and lower interest payments, though it remained elevated due to strong import demand.
Fiscal sustainability
The IMF said fiscal sustainability has improved further despite a significant increase in public investment spending.
What do you think is the biggest risk to Greece’s economic outlook in the coming year?