The governor of the Bank of Greece on Monday emphasized the importance of maintaining political stability, particularly amid rising global uncertainty caused by the war in the Middle East, during his speech at the bank’s annual general meeting.
“In times of heightened uncertainty, political stability is a decisive factor for economic resilience,” Yannis Stournaras said. “The experience of recent years shows that stable politics and a predictable institutional framework are crucial for maintaining macroeconomic balance and effectively managing external crises.”
Stournaras projected that Greece’s economic growth would slow to 1.9% in 2026, reflecting weaker household consumption and a negative contribution from the external sector. He also warned of a slowdown across the eurozone, with growth expected to fall to 0.9% from 1.4% in 2025, citing the impact of the Middle East conflict, energy market disruptions, and rising uncertainty, which increase the risk of stagflation.
Despite the moderation, the Greek economy is expected to continue outpacing the eurozone, demonstrating resilience and ongoing progress toward real convergence. Investments are forecast to remain the main driver of growth, supported by the European Union’s Recovery and Resilience Facility, credit expansion, and foreign direct investment.
Private consumption is expected to rise moderately, supported by higher employment, wages, and disposable income. The labor market outlook remains favorable, with further gains in employment and unemployment projected to fall to 8.2%.
Stournaras said inflation, which had been gradually easing, is likely to rise in 2026 due to renewed external pressures on energy costs, with overall inflation expected at 3.1%, above the eurozone average. Fiscal indicators are forecast to remain healthy, with a high primary surplus of around 3.2% of GDP and a slightly positive overall balance, while the downward trajectory of public debt is expected to continue.
Commenting on monetary policy, Stournaras noted that uncertainty around the European Central Bank’s actions in 2026 will require flexibility. “If energy price increases threaten to create broader and persistent inflationary pressures, affecting medium-term expectations and wage developments, monetary policy is expected to follow a stricter course,” he said.
Regarding the banking sector, Stournaras described the outlook as positive, citing strong 2025 performance that lays the foundation for enhanced resilience, profitability, and capital strength. However, he warned that ongoing geopolitical uncertainty could affect funding costs, loan portfolio quality, and credit growth dynamics.
Stournaras concluded that current international disruptions represent both a threat and a wake-up call for Europe. Strengthening eurozone resilience, he said, will require accelerated European integration and more effective coordination of shared policies.
Domestically, he stressed that maintaining the political will to implement credible reform policies is essential for turning crises into opportunities and building a modern, sustainable, outward-looking, and competitive Greek economy.