Lower growth of 2% and a nightmare scenario for 4% inflation, Greece’s State Budget Office in Parliament forecasts for 2026 and warns of a new energy shock given the developments in the Middle East.
Support from tourism, employment and income, but also a warning of a new energy shock from the Middle East
Lower growth of 2% in 2026 is forecast by the State Budget Office in Parliament, while in the unfavorable scenario inflation could reach up to 4%, a clear deterioration compared to the previous picture that had placed it below 3%.
The Budget Office links the new forecast for 2% growth in 2026, and the risk of 4% inflation to developments in the Middle East, which directly affect international energy markets, the supply chain and ultimately the cost for households and businesses in Greece.
According to the analysis, the base scenario incorporates a price of $90 per barrel for Brent throughout 2026, while in the adverse scenario the price rises to around $100. The forecast also incorporates energy cost support measures of €300 million and the possibility of tightening by the European Central Bank.
It is recalled that in the quarterly report of December 2025, the Budget Office had placed the base estimate for 2026 growth at 2.1%, with a range of 1.9%-2.6%. For the 2025 primary surplus, the estimates converged on a performance of more than 4% of GDP. For 2026, the forecast concerns a primary surplus of 4.5%.
The Budget Office already underlines that inflation in Greece remains higher than the Eurozone average, as it reached 3.1% in February 2026, compared to 1.9% in the Eurozone, making the Greek economy more exposed to a new rise in oil and natural gas.
Positive and negative prospects
In the positive prospects for 2026, the report places tourism first, as travel receipts in 2025 increased by 9.4% and exceeded 23.6 billion euros, while international arrivals at Greek airports increased by 10% in the first two months of 2026, providing a first line of support to the economy, provided that there is no new major exacerbation of the energy shock.
The second positive factor is the labor market and income. The budget Office records as a supportive development the positive employment picture, the new increase in the minimum wage to 920 euros and the income tax reliefs, estimating that these factors support disposable income and private consumption.
On the other hand, the report identifies three main risk fronts for 2026.
he first is the conflict in the Middle East itself, with disruptions in international energy markets and the supply chain. The second is the delay in the implementation of the Public Investment Program at the beginning of the year. The third is the high public debt, which makes the economy more vulnerable when markets react to geopolitical crises.
According to the Budget Office presentation, investment spending in the two months of January-February 2026 was 906 million euros lower than the target and 464 million euros lower than the corresponding period in 2025. This practically means that one of the main pillars of growth started the year weaker, at a time when the external environment is becoming more difficult.
Regarding debt, the BO notes that high public debt leaves the economy more exposed to geopolitical crises, because in such periods the yields of government bonds with fiscal vulnerabilities increase comparatively more. In fact, it recalls that in its previous reports, in October and December 2025, it had emphasized that further debt de-escalation is a necessary condition for better defense against future crises.
How 2025 ended
Despite the warning for 2026, 2025 ended on a much brighter note. The Greek economy grew by 2.1% for the year as a whole and by 2.4% in the fourth quarter on an annual basis, compared to 1.4% in the Eurozone. Growth was mainly driven by private consumption, which increased by 2.5%, exports, which increased by 2.7% overall, and fixed capital investment, which increased by 14% in the last quarter and by 8.9% in 2025 as a whole. The growth in housing was particularly strong, with a change of 41.2%.
Growth of what at 2%? If it is AirBNB then it is of little interest for most Greeks. The fact is that these aggregated statistics should be made illegal, and proper national accounts presented by economic sector. Basically, the statistics being used are fraudulent and meaningless, yet governments continue to use them — in order to fool their voters.