OECD forecast for Greece: development is possible if old mistakes are avoided

Organization for Economic Cooperation and Development (OECD) published a new forecast for Greece, in which it notes moderately positive dynamics, but at the same time points out a number of vulnerabilities that could change the trajectory of development in the coming years.

According to the report, in 2025 the economy is expected to grow by 2.1%and in 2026 – to 2.2%. At the same time, a continued reduction in public debt and the formation of significant primary budget surpluses are recorded.

However OECD emphasizes that development prospects remain sensitive to several factors: wage growth that does not correspond to productivity growthrepetition extreme weather events and incomplete resource development EUincluding funds Ταμείο Ανάκαμψης (Recovery Fund).

Growth under pressure

The organization forecasts growth to slow to 1.8% in 2027, when the active phase of project implementation ends Recovery Fundwhich will lead to a decrease in investment activity. However, private consumption is expected to remain stable due to increased employment and real income.

Exports should strengthen as global demand recovers, and inflation should gradually ease to 2.1% in 2027. However, the labor market remains tight: labor shortages persist and labor costs rose to 8.7%.

Tourism continued to perform strongly in 2025, with revenues in the first half of the year being 11% above 2024 levels. A decrease in government bond yields and a narrowing spread with German securities indicate a stable investment climate.

Fiscal surpluses and debt

OECD fixes the expectation of significant budget surpluses at the level 2.3–2.9% GDP in the period 2025–2027 The 2024 figure reached 4%, providing room for additional spending.

New measures include income tax reform, increased defense and security spending, and expanded rental support programs. The planned increase in the minimum wage by 8% until April 2027 also has an impact on household incomes.

Spending from TΑΑ funds should grow to 4% of GDP in 2026, after which it will gradually decline, which will lead to a slowdown in investment activity.

Strategic challenges

OECD stresses that sustainable reduction of public debt must remain a priority, given the pressure created by aging populationclimate challenges and high investment needs.

To support long-term growth, the organization emphasizes the need to continue reforms aimed at improving the business environment: reducing bureaucracy, reviewing restrictions in professional fields, strengthening vocational training programs and adapting labor market policies.

An important area is expanding access to childcare infrastructure, which, according to OECDcan increase women’s labor force participation and improve labor market balance.

The report concludes: provided that European programs are correctly implemented and macro-financial stability is maintained, Greece can maintain growth. However, any deviation from these conditions can quickly change the prognosis in a less favorable direction.

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