The International Monetary Fund published a staff concluding statement for Greece’s 2026 Article IV consultation mission, finding that growth remains robust on strong domestic demand and Next Generation EU (NGEU) reforms but that the outlook is increasingly uncertain due to the conflict in the Middle East. Staff assess that stronger public sector balance sheets provide room for a growth-friendly but prudent fiscal mix, alongside further steps to bolster financial system resilience and accelerate structural reforms to address low investment, weak productivity growth and adverse demographics. Real GDP grew 2.1% year on year in 2025, unemployment fell to 8.3% in 2025Q4, and inflation was 3.1% year on year in February 2026, while the current account deficit narrowed to 5.7% of GDP in 2025 but remained large. The primary surplus is estimated at 4.4% of GDP in 2025 and public debt is estimated to have fallen by around 10 percentage points to about 145% of GDP, supported by strong revenues and early repayment of Greek Loan Facility loans. Growth is projected to moderate to 1.8% in 2026, with the primary surplus projected at 3.8% of GDP and debt expected to decline to about 110% of GDP by 2031 under the baseline. On financial stability, the Financial Sector Assessment Program (FSAP) finds risks were low before the Middle East conflict and remain manageable, with stress tests indicating banking resilience, while flagging loan concentration risks and legacy issues such as slow distressed debt resolution and contingent liabilities including deferred tax credits (DTCs) and state guarantees. The statement notes that the Bank of Greece has raised the countercyclical capital buffer to 0.5%, effective October 2026, and recommends readiness to tighten further if systemic risks rise, alongside continued refinement of borrower-based measures using the new central credit registry and targeted supervisory enhancements, including for credit servicers and cyber risk, improved Emergency Liquidity Assistance arrangements and a larger deposit insurance fund with a public backstop. Staff also recommend that energy-price support be targeted and temporary, that remaining NGEU funds expected to be disbursed by end-2026 be fully utilised while preserving critical social spending, and that housing affordability pressures be addressed by mobilising underused stock as residential prices rose 7.8% in 2025. IMF staff will prepare a report for consideration by the IMF Executive Board, subject to management approval.
International Monetary Fund 2026-03-24
International Monetary Fund publishes Greece Article IV staff statement projecting 1.8% growth in 2026 and backing macroprudential tightening if risks rise
The IMF's 2026 Article IV consultation for Greece highlights robust growth from domestic demand and Next Generation EU reforms, though the outlook is uncertain due to Middle East conflicts. The IMF notes manageable financial stability risks, recommending fiscal prudence, structural reforms, and targeted energy-price support. The Bank of Greece has raised the countercyclical capital buffer to 0.5%, effective October 2026, with further tightening advised if systemic risks increase.