Greece Maintains Fiscal Stability Amid Structural Challenges
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The Spring Report 2026 of the Hellenic Fiscal Council presents an economy that continues to combine fiscal stability with rising incomes and solid macroeconomic performance, while entering a period where sustaining growth momentum becomes a central challenge. The picture is balanced: Greece outperforms the EU average in key indicators, yet structural weaknesses and the gradual completion of the Recovery and Resilience Facility (RRF) create a new environment requiring careful policy planning.
In 2025, the Greek economy expanded by 2.1%, significantly above the European Union average. Growth was driven by private consumption, strong investment activity supported by RRF resources, and robust tourism. Labour market conditions improved further, with unemployment declining to 8.9%, and projected to fall to 8.4% in 2026. The general government balance recorded a surplus of 1.7% of GDP, while public debt continued its downward trajectory, reaching 146.1% of GDP.
The positive trend was reinforced during the first quarter of 2026, with the Fiscal Council estimating a primary surplus of 3.2% of GDP for the full year. The European Commission, in its Spring 2026 Economic Forecasts, described Greece’s position as “a solid fiscal stance despite expansionary measures,” highlighting the virtuous combination of primary surpluses and increased net spending to support vulnerable households. Improved tax compliance and the digital transformation of the tax administration have strengthened revenues, enabling the government to maintain surpluses without limiting social support.
However, the report underscores that sustaining growth after the completion of RRF funding is the most significant challenge ahead. Long standing structural imbalances — high youth unemployment, low productivity, high external debt and low private savings — remain present. The current account deficit, although reduced to 5.7% of GDP, continues to be elevated due to strong import demand. Inflation, which eased to 2.9% in 2025, is expected to accelerate to 3.2% in 2026, with national statistics already showing an upward trend.
The Fiscal Council stresses that maintaining economic progress requires prudent fiscal policy and deeper structural reforms in areas where Greece lags behind its European partners. Enhancing productivity, increasing investment as a share of GDP and addressing structural weaknesses are essential for transitioning to a new growth model once RRF support phases out.
The Spring Report 2026 provides a comprehensive and evidence based overview of Greece’s macroeconomic and fiscal outlook, highlighting both achievements and the challenges of the coming years. In an environment of heightened geopolitical uncertainty and evolving European fiscal rules, Greece must balance stability with forward looking reforms to secure sustainable growth.
