Greece is in a significantly stronger position today than just a few years ago and meets all the prerequisites to capitalize on opportunities emerging from the transformation of the European and global economy, according to Bank of Greece Governor Yannis Stournaras. However, he cautioned that worsening geopolitical conditions and a new energy crisis are expected to weigh on Europe’s short-term growth prospects in 2026.
Energy Costs and Inflation Pressures
Speaking at the General Assembly of the Hellenic Banking Association, Stournaras explained that rising international energy prices—combined with heightened uncertainty—are negatively affecting consumer and business confidence, dampening domestic demand and intensifying inflationary pressures across the economy.
According to the Bank of Greece’s latest forecasts, the Greek economy is expected to continue growing at rates above the euro area average, supporting the convergence process of real incomes. Specifically, GDP growth is projected at 1.9% in both 2026 and 2027, rising to 2.0% in 2028.
The surge in energy costs is expected to trigger secondary price effects across both services and industrial goods. Meanwhile, food inflation is anticipated to remain elevated, reflecting higher energy expenses throughout the entire production and supply chain.
Overall inflation is forecast to rise to 3.8% in 2026—up from 2.9% in 2025—before easing to 2.6% in 2027 and 2.3% in 2028, as price pressures from energy and food gradually subside.
Fiscal Progress and Debt Reduction
Stournaras also highlighted Greece’s continued fiscal improvement, noting that the primary surplus and the public debt-to-GDP ratio continued their downward trajectory. The debt ratio fell to 146.1% in 2025 from 154.2% in 2024—the largest annual decline among all EU member states.
Banking Sector Strength and Role
On the banking sector, Stournaras emphasized that strengthening of core indicators has created the foundation for further expansion of Greek banks’ activities. Banks are called upon to ensure smooth financing for the real economy—applying prudent credit standards, leveraging their strong liquidity position, and further bolstering capital adequacy.
In this way, they will continue supporting investment, private consumption, and sustainable economic growth—while simultaneously safeguarding financial stability.
Central Banks and Evolving Payment Systems
Regarding central banks within the Eurosystem, Stournaras pointed to the growing relevance of stablecoins, stressing the need for timely adaptation—not only of central bank money itself, but also of the payment systems they oversee and the broader regulatory and supervisory framework.