Greece 4Q unadjusted GDP rise 2.5% y/y

Greece 4Q unadjusted GDP rise 2.5% y/y

Greece’s economy recorded a 2.5% year-over-year (y/y) GDP growth in the fourth quarter of 2024, marking one of the strongest expansions in recent years. This followed a revised 0.8% quarterly contraction in Q3 2024, with the annual growth rate reflecting resilience amid mixed quarterly performance. The expansion was driven by robust private consumption and tourism, supported by strong domestic demand and favorable external conditions. Fixed investments also contributed, particularly in construction and equipment, as EU-funded projects under the Recovery and Resilience Facility (RRF) gained momentum.

However, growth momentum moderated in early 2025. Q1 2025 GDP expanded 2.2% y/y, down from the Q4 2024 rate, as net external demand weakened due to declining exports and rising imports. Gross fixed capital formation slowed sharply in Q1, contracting 6.1% quarter-on-quarter, while government spending dipped 1.1%. Despite these challenges, household consumption showed signs of recovery, rising 1.3% in Q1.

Looking ahead, the European Commission projects Greece's GDP to grow 2.1% in 2025 and 2.2% in 2026, supported by ongoing EU funding and fiscal stimulus measures. However, growth is expected to moderate to 1.7% in 2027 as RRF implementation nears completion. Inflation is forecast to stabilize at 2.4% by 2027. While structural labor market challenges persist, unemployment fell to 8.2% in October 2025, its lowest level since 2009.

The fiscal outlook remains stable, with primary surpluses and strong nominal GDP growth projected to reduce the debt-to-GDP ratio below 140% by 2027.