IMF’s ‘Asterisks’ for Greece: How Tariffs and Services Impact Inflation and Growth

The conclusions of an IMF report on Greece include ‘asterisks,’ recognizing economic progress while highlighting potential adverse factors that could affect inflation and growth. Although the short-term economic outlook for Greece remains favorable, with real GDP expected to grow by 2.1% in 2025, risks related to international trade tensions are emphasized. The IMF notes balanced growth risks but rising inflation risks, largely influenced by the ongoing tariff war. A slowdown in major Eurozone economies, such as Germany, poses significant concerns for Greece’s exports. Moody’s has warned that countries like Ireland, Slovakia, Germany, Hungary, Italy, and Austria will be heavily impacted by tariffs, affecting Greece’s key trading partners. Greece faces the risk of losing a significant portion of its exports if these economies experience recessions. Additionally, domestic inflationary pressures remain high due to persistent service sector price increases and wage hikes. These factors could exacerbate inflation, complicating Greece’s efforts to boost competitiveness and exports.