Greek Economy to Grow 2.5% in 2025: Bank of Greece

In a report released on Friday, the Bank Greek of Greece (BoG) projects the economy will expand 2.5% in 2025 and 2.3% in 2026.

The report highlights the investments bolstered by EU funds are expected to drive economic activity, accompanied by private consumption, which is expected to benefit from a steady increase in real disposable income.

Private demand will be further boosted by rising employment, wage increases amid a tight labor market, and an increase in the minimum wage, with easing inflation also aiding.

The public debt-to-GDP ratio is forecast to fall below 150% by 2025, aided by the primary budget surpluses reinforcing the Greek economy even more. This is estimated to buttress investor confidence and lead to further upgrades in the country’s credit rating.

Exports of goods and services are projected to grow at an average rate of 3.8% over 2025-2026. However, the contribution of the external sector to GDP is expected to be negative due to increased imports driven by rising investment activity.

Regarding inflation, the Harmonized Index of Consumer Prices (HICP) is expected to ease to around 2% by the end of 2026, although it will remain slightly above that level. In 2027, however, inflation is projected to temporarily rise to 2.5%, driven by the implementation of the ETS2 scheme in the energy sector. Core inflation, which excludes energy and food prices, is forecast to decline to 2.2% by 2027, mainly due to lower inflation in industrial goods, excluding energy, and to a lesser extent, in services.