The International Monetary Fund has lauded Greece’s robust economic recovery and the strengthened resilience of its banking sector, while cautioning that inflationary pressures, particularly from rising wages and service sector prices, remain a concern.
In its latest country report, the IMF projects that Greece’s real GDP will continue to grow at a solid pace, with a 2.1% expansion forecast for 2025. Investment, driven by projects funded through the EU Recovery Fund, is expected to remain a key growth engine. Meanwhile, private consumption is set to stay strong, buoyed by rising incomes and employment.
Headline inflation is projected to ease as global energy prices stabilize. However, core inflation – which excludes volatile energy and food prices – is expected to remain persistent, fueled by wage growth and sustained price increases in the services sector.
The IMF highlighted notable improvements in Greece’s banking system. The ratio of non-performing loans has dropped to around 3% at major banks, while profitability remains high, strengthened capital adequacy. Liquidity and funding risks have also diminished, with buffers exceeding both EU averages and regulatory thresholds.
While risks to the growth outlook are seen as balanced, the IMF warned that inflation risks are tilted to the upside. Potential headwinds include a slowdown in major eurozone economies, geopolitical tensions and broader global uncertainty. It emphasized that accelerating structural reforms could further enhance economic resilience.
IMF officials praised Greece’s continued economic expansion and the declining public debt-to-GDP ratio. However, they noted the eventual phase-out of Recovery Fund support and long-term challenges posed by structural imbalances and crisis legacies. They urged a balanced policy mix to sustain growth, ensure fiscal stability and bolster the financial sector.
The report commended Greece’s fiscal consolidation efforts, driven by strong revenues and reforms to combat tax evasion. Maintaining primary budget surpluses above 2% of GDP was recommended to reinforce debt sustainability and build buffers against future shocks.
To address long-term growth constraints, the IMF advised prioritizing public investment, particularly in green and digital infrastructure, while keeping pension and wage spending in check. It also called for more inclusive labor force participation – especially among women – and better skills development to boost productivity.
Finally, the IMF welcomed the financial sector’s improved resilience but urged vigilance as credit growth accelerates. It recommended that banks channel their strong profits into bolstering capital buffers and loss-absorbing capacity to safeguard stability.
Reacting to the report, Deputy Premier Kostis Hatzidakis said that the IMF has been “added on to the long list of international organizations that underline the significant progress of the Greek economy.”
Commenting on the Article IV consultation concluded on March 31, Hatzidakis noted that the recognition “has added value: on one hand, it comes in a global environment of turmoil, and on the other nobody forgets how strict of a judge the IMF was on Greece in all the past decades, particularly during the economic crisis.”
While acknowledging that not all challenges have been resolved, he stressed the government’s commitment to “a healthy policy on fiscal issues and the promotion of all necessary reforms.” [Moneyreview, AMNA]