The Greek economy is forecast to achieve a 2.1% growth in 2025 (previously set at 2%), according to a report released by the International Monetary Fund (IMF). The report estimates Greece’s real GDP growth rate will remain high before easing in the medium term.
The report by the IMF suggests Greece’s economic expansion will be fueled primarily by investments, supported by projects financed through the EU Recovery Fund.
Positive employment figures and income growth will support private consumption which is forecast to remain stable. As global energy prices settle, overall inflation is expected to continue its downward trend, although core inflation will be more persistent due to rising service costs and wage increases.
With financing through Recovery Fund financing expiring, along with demographic challenges and sluggish productivity growth, GDP expansion is expected to slow to around 1.25% in the medium term. The current account deficit is projected to gradually decline below the 4% threshold as imports tone down.
On the issue of public debt, the IMF points out that public finances are reinforced by ongoing efforts for structural reforms and fiscal consolidation leading to growth potential and energy security.
By the end of 2024, the public debt-to-GDP ratio is estimated to have declined by more than 50 percentage points from its peak in 2020, supported by strong economic growth, high inflation, and significant fiscal consolidation.
Greece’s primary surplus is expected to remain high at roughly 2.5% of GDP in 2025, as decreased revenues from the further slash of social security contributions will be largely offset by reform-related revenues targeting tax evasion and tax compliance.
