The Greek economy will be affected by international instability and the war in the Middle East, the Bank of Greece confirmed in its 2026 forecast, noting that it is starting from a stronger position than in previous crises.
Central banker Yannis Stournaras stressed that any government measures to contain the effects should only be targeted and temporary, and that political stability remains a critical factor for the economy’s resilience.
In the report presented on Monday, the BoG forecasts growth to slow to 1.9% in 2026, from 2.1% in 2025, but also compared to a previous forecast of 2.1%. In the area of inflation, it projects a significant acceleration to 3.1% in 2026, from 2.9% in 2025 and from 2.1% expected in the December interim report.
The reasons Stournaras cited for the downgrade of the forecasts are mainly the higher energy prices, which are expected to increase inflation and burden disposable income, limiting the dynamics of consumption.
Investment is estimated to remain the main driver of growth, with a projected increase of 8.8% and support from the resources of the Recovery Fund, credit expansion and foreign direct investment. Private consumption is expected to continue to grow, although at a milder pace of 1.9% in 2026, while the outlook for the labor market remains positive, with a further decline in unemployment to 8.2%.
The BoG forecasts that fiscal aggregates will remain at healthy levels, with the primary surplus reaching 3.2% of GDP and the overall fiscal result remaining marginally in surplus at 0.2% of GDP in 2026. According to Stournaras’ report, debt is expected to continue its downward trend by an additional 8.4 percentage points, to 137.7% of GDP.
The forecasts do not indicate a derailment of the course of the economy, which continues to grow faster than the eurozone. However, as the BoG warned, the likelihood of more adverse developments is now increased if geopolitical tensions escalate or the war is prolonged.