The Greek economy is projected to experience steady growth in the coming years, with a forecasted growth rate of 2.5% in 2025. This growth is driven by several factors, including rising employment rates, increasing real wages, and a robust tourism industry that continues to boost consumption. Despite a slowdown in new job creation, the employment rate and labor force shortages remain at historically high levels.
Wage growth in Greece reached 5.5% in the fourth quarter of 2023, with significant increases in the minimum wage also taking effect in April 2023 and April 2024. The absorption of Recovery and Resilience Fund resources and improvements in bank stability are expected to support investment, despite tight financial conditions. Investment is forecasted to grow by an impressive 9% in 2025.
Inflation is expected to continue declining at a slower pace than previously predicted, with an easing forecasted for the last quarter of 2025. Despite this decline, public debt remains a significant challenge for Greece’s economy. However, efforts to reduce public debt are showing progress, as evidenced by an estimated decrease from 161% of GDP in 2023 to 151% in 2025. This reduction is due not only to economic growth but also improved tax collection.
The OECD has highlighted several challenges that Greece must address if it wants to sustainably reduce its debt while investing in key areas such as infrastructure development, demographic shifts response, and climate change action. To achieve this goal, Greece will require sustained and strong economic growth while focusing on increasing productivity levels which currently lag behind OECD averages. Improving productivity will create more fiscal space and enhance living standards for Greek citizens.
Overall, while there are still challenges ahead for Greece’s economy, these projections suggest that with continued hard work and focus on key areas of improvement
