Greece is expected to continue registering growth rates above 2% until 2026, return to high primary surpluses close to 3% in the years 2024-2025, reduce unemployment at a slower rate than in the past but also reduce public debt just over 140% of GDP in 2026, according to the European Commission’s Autumn Forecasts.
A challenge for the Greek economy will be the pending legal cases, the report said. On the other hand, the government’s efforts to increase tax compliance through digitization may yield higher revenues in 2025, it added.
Based on the report, inflation is predicted to reach 3.0% in 2024 and gradually decline to 1.9% by 2026. The steady upward trend of the nominal GDP is even expected to contribute to the steady reduction of the public debt, among the largest in Europe, close to 140%, by 2026.
After the increase in minimum wage, private consumption benefited from relatively faster wage growth for lower-income households. Equipment investment accelerated alongside a strong recovery in corporate credit expansion, while rising imports accompanied by subdued export growth caused net exports to decline.
Thanks to strong domestic demand, real GDP growth is expected to average 2.1% in 2024, slightly below the Commission’s spring forecast of 2.2% growth this year. Overall, GDP growth is projected to remain above long-term growth potential and is projected at 2.3% and 2.2% in 2025 and 2026, respectively.
Private consumption will continue to grow at a strong pace, supported by steady growth in real income.
Investment is projected to accelerate further, reaching the record level of 9% in 2025, thanks to the implementation of the Recovery Fund and the improvement of financing conditions.
The recovery in external demand is expected to benefit exports, further supported by cost competitiveness gains accumulated in the past and structural reforms aimed at improving export performance. Import growth is projected to remain strong.
Employment – unemployment
Structural challenges may limit further improvements in the labor market. The employment rate rose to 54.9% (15–74-year-olds) in seasonally adjusted terms in the second quarter of 2024, but remains one of the lowest in the EU.
The unemployment rate fell to 9.5% in August, although it remains one of the highest in the EU. Vacancy rates increased further in the first half of 2024, especially in construction, tourism and highly skilled sectors.
Employment growth is set to continue, albeit at a slower pace, as skills mismatches and structural bottlenecks, including a lack of child and elderly care solutions or a tight regulatory framework for part-time work, limit job growth supply. The unemployment rate is projected to fall to around 9.0% by 2026, the lowest level in a decade. It is seen at 10.4% in 2024, 9.8% in 2025 and 9.2% in 2026.
