OECD Report: Greece’s Economic Growth to Outpace the Eurozone

• 14 June, 25

According to the latest Economic Outlook report released by the Organisation for Economic Co-operation and Development (OECD), Greece’s economy is projected to grow by 2% in 2025 and 2.1% in 2026 — nearly double the average growth rate of the Eurozone during the same period. This strong performance highlights Greece’s increasingly solid economic fundamentals and resilience amid global uncertainty.

Recovery Fund and Wage Increases Drive Economic Expansion

The OECD identifies the primary drivers of Greece’s growth as continued investment from the EU’s Recovery and Resilience Facility, which is expected to support infrastructure and digital economy development. Additionally, recent increases in the minimum wage are likely to boost consumer spending, despite external demand weakness weighing on exports.

Inflation Expected to Ease, But Service Sector Faces Rising Costs

The report forecasts Greece’s overall inflation rate to decline from the current 2.5% to 2% by 2026, largely thanks to falling international oil prices. Although rising service sector costs and elevated trade expenses pose challenges, the overall inflation outlook remains manageable.

However, the OECD cautions that potential delays in EU fund disbursements, excessively rapid wage increases, or frequent extreme weather events could negatively affect these positive projections.

Fiscal Discipline and Tax Reforms as Key Pillars

On the fiscal front, Greece is expected to maintain prudent policies, with primary budget surpluses projected at 2.1% and 2.2% of GDP in 2025 and 2026, respectively. This is largely attributed to improved tax compliance.

The OECD emphasizes that in order to create more fiscal space for easing the labor tax burden on low-income groups, Greece should continue cracking down on tax evasion, reducing unnecessary tax exemptions, and optimizing social resource allocation to stimulate labor market participation.

Exports Face Challenges, Structural Reforms Must Accelerate

Despite the generally positive outlook, Greece still faces external headwinds, including new U.S. tariffs and weakened European demand. Low productivity and insufficient structural competitiveness remain long-term challenges.

The OECD recommends Greece increase investment in workforce skills, vocational training, and labor market reforms. Additionally, simplifying administrative processes and fostering a business-friendly environment are key to unlocking long-term growth potential.

Eurozone Recovery Remains Weak, Greece Stands Out

In comparison, the Eurozone’s overall GDP growth is projected at just 1% in 2025 and 1.2% in 2026, significantly below Greece’s expected performance. As real disposable income recovers, private consumption will be a key growth driver for the Eurozone.

While investment will benefit from improved financing conditions and support from the EU Recovery Fund, slowing wage growth remains central to bringing inflation down.

OECD Lowers Global Growth Forecast Amid Rising Risks

Globally, the OECD warns that rising trade barriers and policy uncertainty are undermining business and consumer confidence. It has revised its global growth forecasts downward to 2.9% for both 2025 and 2026, down from 3.3% in 2024.

Countries are also grappling with high debt levels, increasing defense expenditures, climate transition costs, and population aging. Additionally, weak real estate investment and overvalued stock markets pose potential systemic risks.

Greece Emerging as a New Growth Engine for the Eurozone

Despite persistent external challenges, the OECD concludes that Greece, supported by structural reforms, Recovery Fund investments, and sound fiscal policies, is on track to continue outperforming the Eurozone average over the next two years. This indicates that Greece is gradually transforming from a crisis-hit economy into one marked by stable growth and sustainable development.

Cre: news.gtp.gr