The Hellenic Parliament’s Budget Office has marginally lowered its 2026 GDP growth forecast to 1.9%, down from 2.0% in its previous report. The updated projection carries a range of 1.7% to 2.1%. Despite the slight downward revision, the Greek economy remains on solid ground—outperforming the euro area overall.
Greek Growth Outpaces Euro Area
In the first quarter of 2026, Greece’s GDP expanded by 2.0% year-on-year, significantly ahead of the euro area’s 0.3% growth. This performance was driven primarily by private and public consumption, exports, and investment—though rising imports partially offset their contribution to overall GDP growth.
Private consumption rose by 0.7%, while public consumption increased by 1.6%. Exports of goods and services grew collectively by 2.4%: services exports rose 3.1%, and goods exports rose 2.8%. In contrast, total imports of goods and services edged up just 0.5%—with services imports climbing 3.2% and goods imports falling 0.6%.
Strong Investment Momentum
Fixed capital formation surged 12.1%, with growth recorded across all subcategories. The Budget Office stresses that as the Recovery and Resilience Facility (RRF) concludes, fully leveraging remaining EU funds—and attracting alternative financing for cutting-edge technology investments—will be critical for sustaining momentum.
Global Uncertainty Looms
Geopolitical tensions in the Middle East and disruptions in energy markets continue to weigh on global and European economic prospects. While the current episode appears milder than the 2021–2022 energy crisis, its effects are already visible in growth, inflation, and trade patterns.
In May 2026, Greek inflation stood at 4.9%, notably above the euro area average of 3.2%. The Budget Office warns that this persistent divergence remains a concern, undermining Greece’s competitiveness and current account balance.
Food, tobacco, and alcohol inflation eased to 2.6% in May—down from 4.3% in February—but still exceeded the euro area’s 1.9%.
Fiscal Performance Remains Robust
For 2025, the General Government recorded a surplus of €4.29 billion (1.7% of GDP), with a primary surplus of €12.13 billion (4.9% of GDP). In the January–April 2026 period, the adjusted consolidated primary surplus reached €5.896 billion—or 2.3% of GDP—up €962 million compared to the same period in 2025.
VAT revenues rose by €1.12 billion—a development attributed partly to stronger domestic demand and improved tax administration.