The economy is growing, the Greeks are getting poorer: the IMF has destroyed the myth of the “success story”

The IMF recognizes economic growth, debt reduction and the recovery of Greek banks. But households remain without savings, and income levels are among the lowest in the world. EU.

The head of the International Monetary Fund’s mission in Greece, Chun Shik Kang, said at the Economist’s annual Government Roundtable that the country has made significant macroeconomic progress, but the recovery remains incomplete.

IN IMF report on Greece It notes that real GDP grew by 2.1% in 2025, government finances strengthened, and the banking sector cleared balance sheets of a significant portion of bad loans.

But the same IMF admits: per capita income is more than 15% behind its pre-crisis trajectoryinvestment and productivity remain insufficient, and many families have low disposable income and limited reserves for emergency expenses.

Greece remains at the bottom of the European table

Preliminary data Eurostat show that in 2025, GDP per capita in Greece, taking into account purchasing power, was only 68% EU average.

Greece and Bulgaria shared last place among the EU states. Therefore, the government’s thesis about “convergence with Europe” reflects the direction of movement, but not the level achieved: the country can grow faster than individual partners and still remain at the European bottom in terms of income.

Income is growing, but there are still no savings

Kyriakos Mitsotakis previously said real disposable income rose 22% over six years. This figure takes inflation into account, but is an aggregate average and does not show how growth has been distributed among different groups of the population.

The situation with savings is more indicative. According to ΕΛΣΤΑΤin 2024 the savings rate of Greek households was minus 2.5% versus 14.5% on average in the EU.

In the fourth quarter of 2025, household disposable income grew by 9.8% in nominal terms, but the savings rate still remained negative – minus 3.2%. This means that families collectively continued to spend more than they received, using previous savings or borrowed funds.

Thus, income growth failed to create a financial cushion. A significant portion of the increase is absorbed by housing, food, energy, transport and services. Government statistics show an increase in income, and the family budget discovers that by the end of the month the money has disappeared somewhere again. Economic physics available to every cash receipt.

Banks have improved, debtors remain

The share of problem loans in systemic banks decreased to approximately 2.5%, and bank profits and liquidity increased noticeably. However, a significant portion of the old debt was sold to funds or transferred to management companies.

This improved bank balances, but did not mean the disappearance of citizens’ and enterprises’ liabilities. In other words, the problem was largely transferred from banking reporting to beyond its borders.

How much is the national debt?

As of March 31, 2026 the central administration’s debt was 400.5 billion euros. However, this indicator should not be confused with the consolidated public debt according to the European methodology.

According to Public debt management agenciesgeneral government debt was €360.54 billion. The difference arises from domestic obligations and methodological adjustments.

The debt-to-GDP ratio is indeed falling rapidly. But this happens not only due to repayments, but also due to the growth of nominal GDP and prices. This dynamic is favorable for the state, but in itself it does not increase the purchasing power of citizens.

The IMF again demands reforms

A fund spokesman said the “glass of reform remains half full.” We are talking about increasing productivity, speeding up justice, completing the cadastre, expanding employment and reducing administrative barriers.

In the current report, the IMF does not require new direct cuts in pensions and wages. In contrast, the fund allows for increased spending on health care, education and productive investments as long as they do not undermine the long-term sustainability of the debt.

Editorial comment

Greece’s economic recovery cannot be denied: the economy is growing, unemployment has fallen, banks have become stronger, and the public debt to GDP ratio is falling. But the recovery of the state and banks turned out to be noticeably faster than the recovery of households.

When GDP per capita remains at 68% of the EU average, and families continue to eat through their savings, it is premature to talk about a completed “success story”. The main question is not whether the economy is growing on the graph, but how much of this growth remains with citizens after paying for housing, food, energy and taxes.

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