Greece's economy held up well during recent crises and has outpaced growth in the euro area since the global energy crisis. Further policy action is now needed to ensure continuing strong growth and fiscal sustainability, notably to keep public debt on a firmly declining path, according to a new OECD report.
The latest OECD Economic Survey of Greece projects GDP growth to rise from 2.3% in 2024 and 2.2% in 2025 to 2.5% in 2026. The government plans primary fiscal surpluses of 2.5% of GDP in 2025 and 2.4% in 2026. Inflation is proving persistent and remained at 3.2% in October 2024, but is projected to decline gradually, returning close to target by end 2026.
"Greece has reaped the benefits of the many important reforms it has implemented over the years, but more needs to be done to promote competition, allow more youths and women to participate in the labour market and maintain significant primary fiscal surpluses while preserving investment." OECD Secretary-General Mathias Cormann said, presenting the Survey in Athens alongside Greece's Prime Minister, Kyriakos Mitsotakis, and Minister of Finance, Kostis Hatzidakis. "Greece's outlook remains positive, with disinflation, improving growth in trading partners and increasing disbursements of European funds set to support growth over the coming years."
Public debt has been declining since 2020 but remains high, at 163.9% of GDP in 2023. Maintaining public debt on its firmly declining path and increasing fiscal space for investment will require additional efforts to reduce tax expenditures and tackle tax evasion. Moreover, a gradual shift of spending towards infrastructure, education and health would improve both economic and social outcomes.
Significant challenges remain. Labour productivity has stagnated at low levels over the past decade. Despite recent progress, investment remains relatively low, particularly in intangibles and R&D. The productivity gap between small firms and large enterprises is large, with many of the large enterprises failing to grow and adopt new technologies.
Further reforms to strengthen competition, reduce regulatory burdens, improve access to skills and financing would support firm growth and innovation. Competition remains weak in some parts of the economy, making it all the more important for Greece to review some of the unnecessarily stringent regulations in services and to ease entry restrictions in professional services.
Skill shortages have increased. Strengthening apprenticeships and vocational training is key to ensure a supply of skills that better matches the needs of employers. The expansion of childcare capacities would allow more women to join the labour market and support employment growth.
Extreme weather events are becoming more likely with a warming climate and could lead to renewed disruptions of production and reduce domestic demand. Greece has cut emissions by 42% over the past two decades and renewable energy generation is expanding rapidly. A mix of investment, tighter regulations and emission pricing, complemented with financial support for vulnerable groups, can steer households and business to move towards greener technologies.
See an Overview of the Economic Survey of Greece with key findings and charts
