Greece

In 2025, the Greek economy continued to expand at a faster pace than the Eurozone (+1.8% expected vs +1.4% in real terms), driven by solid investment supported by NGEU funding and FDI, a cyclical recovery in tourism demand and the steadfast implementation of structural reforms. Although the economy has remained resilient despite heightened global uncertainty and weaker external demand, we remain cautious about the outlook: We expect GDP to grow by an average of +1.5% in 2026-2027.

Investment performed solidly in the aftermath of the pandemic. Gross fixed capital formation reached a record high of 18% of GDP, the highest reading since 2010. It is important to note that the strong investment trends in late 2025 were further supported by an upward revision of investment levels, in real terms, by 6.0% for H1 2025 and by 5.0% for 2024. In particular, about 50% of this revision reflects stronger non-residential investment spending, while approximately one-quarter is due to higher residential construction activity. Moreover, the final year of inflows from Next Generation EU funds will provide some support, with delayed impact feeding through in the coming years. Indeed, Greece is one of the major beneficiaries of the NGEU facility and is expected to mobilize around EUR36bn until 2026.

Private consumption proved resilient throughout the period of elevated uncertainty and surging interest rates, helped by easing inflation and recovering real incomes. Intense tourism activity in the summer also supported net trade in 2025; the first nine months of the year closed with record-breaking visitor numbers and revenues, estimated above EUR20bn, up 9% from 2024.

The labor market experienced a steady recovery, with the unemployment rate remaining close to 17-year lows in October 2025 at 8.6%, similar to levels seen before the sovereign debt crisis. The driving force behind this marked improvement has been robust employment growth, with a shift from part-time to full-time workers. Further active labor market policy remains crucial to improve conditions; while the participation rate has gradually risen to about 76%, it remains among the lowest in EU countries, with a higher gap for women.

Greece’s business environment has improved in recent years but remains regulated and complex. It is characterized by a recovering, service-based economy (tourism, shipping) with significant EU investment in digital and green transitions, but still faces challenges from bureaucracy and judicial slowness, though recent labor reforms enhance flexibility. Key opportunities lie in tech, renewable energy, tourism and logistics.