Stournaras: Limited Impact of US Tariffs on Greek Economy

The impact on the Greek economy from the increased tariffs by the US will be limited, according to the assessment of the Governor of the Bank of Greece, Yannis Stournaras. He also forecasted another reduction in the ECB interest rate to 2%. Speaking at the CEO Club, Mr. Stournaras noted that “Greece has minimal dependence on the US, and therefore expects limited direct effects from the tariff hikes.” However, he added that “there might be indirect impacts as a global trade slowdown could reduce demand for Greek products and services, limiting growth prospects. Additionally, heightened market uncertainty acts as a deterrent to investments as businesses avoid risks in an unstable environment.” Meanwhile, recent upgrades in credit ratings for both the Greek government and banks highlight the Greek economy as a positive exception amid current international volatility. Regarding future ECB moves, the Governor stated that “policy interest rates will likely continue to decrease until they reach 2%. Markets anticipate further reductions, but we must remain cautious due to high uncertainty.” Beyond international and European risks, additional uncertainties about Greece’s economic prospects include potential delays in absorbing Recovery Fund resources, increasing frequency and intensity of natural disasters due to climate crisis, tightening labor markets, and higher wage increases. To effectively address these challenges, a coherent economic strategy is required, focusing on fiscal balance, financial stability, reform consistency, and enhancing productive investments. Accelerating the absorption and effective use of Recovery Fund resources is crucial to close the investment gap, boost potential output and structural competitiveness, and improve overall economic resilience. According to the latest estimates by the Bank of Greece, growth is expected to remain at 2.3% in 2025—well above the Eurozone average. Private consumption and investments will continue to drive growth. The ongoing economic recovery will be accompanied by further unemployment decline to 9.9%, while inflation is expected to slightly ease to 2.9%. Fiscal metrics are projected to remain healthy through 2025, with a primary surplus forecasted at 3.2% of GDP and public debt continuing its downward trajectory to 143.2% of GDP.