Analytical agency Standard & Poor’s reduced the growth rate of the Greek economy to 1.7%

Standard & Poor’s revised economical maturation forecast Greecereducing the expected fig for 2026 to 1.7% from antecedently predicted 2.3%.

At the aforesaid time, the bureau maintains its appraisal of the stability of the economy, but warns of a slowdown successful dynamics against the backdrop of outer risks.

Growth is slowing but remains supra the eurozone average

According to the investigation Standard & Poor’sthe Greek system will proceed to grow, but astatine a much mean pace. Despite the forecast revision, the state should still outperform eurozonefor which maturation is expected astatine astir 1%.

The main slowdown factors are:

• geopolitical instability successful Middle East,
• rising vigor prices,
• decline successful outer demand, including tourism.

It is particularly emphasized that the secondary effects of the struggle could deed the tourism sector, a cardinal source of income for the country. Yes, tourists tin take person destinations, but astatine the aforesaid clip the wide request for aerial travel is decreasing owed to rising prices and uncertainty. A classical situation: there seems to beryllium a chance, but economics says “not a fact.”

Internal factors support the economy

Despite outer pressure, domestic demand remains stable. The system is supported by:

• strong labour marketplace (unemployment has dropped to 8.9%),
• growth successful existent incomes,
• accelerating investments utilizing funds RRF — Mechanisms of betterment and resilience EU.

Investments financed by European funds will partially offset the diminution successful outer demand, particularly up of the cardinal disbursement deadline – August 2026.

Weak constituent – outer imbalances

One of the cardinal risks remains current relationship deficitwhich successful 2025 amounted to 5.7% of GDP. Although the fig has decreased compared to 2024 (7.2%), it remains a structural problem.

In 2026, it is expected to worsen to 7.3% of GDPwhich is associated with rising vigor prices and dependence connected imports.

The Greek system remains heavy babelike connected outer supplies, particularly hydrocarbonswhich makes it vulnerable to fluctuations successful planetary markets. And yes, this is the aforesaid addiction that has been talked astir for twenty years now, but somehow everyone “doesn’t person time” to get free of it.

Government finances look stronger than expected

Against the backdrop of these risks, the fiscal situation remains unexpectedly stable. In 2025 it was recorded:

• primary surplus 4.8% of GDP,
• overall surplus 1.7% of GDP.

This is importantly amended than archetypal forecasts. Main reasons:

• high tax revenues (especially VAT),
• cost control,
• growth successful economical activity.

In addition, the authorities partially benefits from ostentation done indirect taxes. That is, citizens wage much – the fund feels better. The system sometimes resembles a strange mechanics for redistributing discomfort.

Debt is falling but remains high

According to Standard & Poor’sthe ratio of authorities indebtedness to GDP will proceed to decline:

• to 131% successful 2026,
• up to astir 110% by 2029.

At the aforesaid time, the indebtedness illustration remains comparatively favorable:

• average repayment play – approx. 18.7 years,
• maintenance outgo – approx. 1.3%.

However, precocious wide indebtedness levels proceed to bounds the country’s lending potential.

Risks and scenarios

Standard & Poor’s considers respective improvement scenarios:

• base — gradual alteration successful tension and constricted interaction of the vigor crisis,
• negative — intensifying struggle and increasing outer deficit.

Separately, the hazard of interruptions successful lipid supplies is noted, particularly fixed the dependence connected imports from Iraqwhile state supplies are considered much stable.

Long-term challenges

Structural problems include:

• low competitiveness,
• weaknesses successful the judicial system,
• perception of corruption,
• demographic aging.

Population Greece decreased by much than 6% from 2011, and the proportionality of citizens implicit 65 years of property by 2050 will beryllium 1 of the highest successful EU. This means semipermanent unit connected the economy, pension system and labour market.

Political factor

According to the agency, elections are expected earlier 2027while the ruling New Democracy Maybe lose the implicit majority, but clasp powerfulness done a coalition.

Even successful this lawsuit Standard & Poor’s does not expect important changes successful economical argumentation – which, translated into quality language, means: the people will stay the same, careless of who is formally astatine the helm.

Result: Greece’s system remains resilient but vulnerable. There is growth, but it is weaker. There is money, but with reservations. And the future, arsenic usual, depends connected outer factors implicit which the state has astir nary influence. A very convenient position, by the way.

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