Bank of Greece Forecasts a 2.5% GDP Rise in 2025

The Bank of Greece (BoG) projects the country’s economy will expand at a higher rate this year over the next 3-year period in a report.

The BoG believes the DGP acceleration in 20205 will buttressed by a further ratings upgrade by international agencies.

In more detail, the central bank sees the economy growing by 2.5% in the current year, marking a 0.2-point rise compared to 2.3% in 2024.

Projections for subsequent years indicate a slowdown, with growth rates forecasted at 2.3% in 2026 and 2% in 2027.

The monthly economic bulletin of the Bank of Greece notes the Greek economy is set to achieve significantly higher growth rates in 2025 and 2026 compared to the eurozone average.

The Foundation for Economic and Industrial Research (IOBE) aligns with these optimistic forecasts, projecting a 2.4% growth rate for 2025. Despite this positive outlook, uncertainties in the international environment remain a concern.

The primary drivers of Greece’s economic activity will continue to be investment spending, bolstered by European funding, and robust consumption. Consumption is expected to benefit from higher real disposable incomes due to ongoing employment growth, wage increases, minimum wage hikes, and easing inflationary pressures.

Moreover, the anticipated reduction in the public debt-to-GDP ratio—expected to fall below 150% by 2025—combined with the achievement of primary fiscal surpluses, is projected to improve investor confidence further and lead to additional upgrades of the country’s credit rating.

Some risk factors that might impact the forecast include a deterioration of the economic climate in the common European currency union, the Eurozone; a rise in the adoption of protectionist economic measures, and a worsening of the wars in Ukraine and the Middle East.

Source: tovima.com