As Greece enters 2026, the government appears confident that the period of economic growth will continue. Kyriakos Pierrakakis, Greece’s Minister of National Economy and Finance, characterized the new year as a period of “growth, investment, and citizen-centric policy.”
In a statement to AMNA, he presented a highly optimistic outlook for the Greek economy, backed by the following specific targets:
- GDP Growth: Projected at 2.4% (double the Eurozone average).
- Investment: Expected to grow by 10.2% (four times the EU average).
- Unemployment: Projected to drop to 8.6%, the lowest level since 2008.
- Inflation: Anticipated to stabilize at 2.2%, easing the cost-of-living pressure on households.
- Primary Surplus: Aimed at 2.8%, signaling strong fiscal discipline alongside growth.
The Minister also emphasized that economic success is hollow unless it improves the daily lives of citizens.
Challenges for Greece’s economy in 2026 and beyond
Such optimism is challenged by many economists who caution that Greece is shifting from a period of rapid growth to a more demanding phase as the safety net provided by the EU’s Recovery and Resilience Facility (RRF) is beginning to wind down.
The RRF has been the primary engine of Greek investment since the pandemic. By 2026, the majority of these funds will have been absorbed or committed.
As of the start of 2026, Greece has been allocated a total of €35.95 billion ($42.13 billion) from the EU’s Recovery and Resilience Facility (RRF), known as the “Greece 2.0” plan.
The funding is split almost equally between:
Grants: €18.22 billion (non-repayable)
Loans: €17.73 billion (low-interest)
By late 2025, Greece had already successfully absorbed about 65% of its total allocation. Following the disbursement of the 6th payment request in November 2025, total receipts reached €23.4 billion (approximately $27 billion).
Greece should therefore transition from growth fueled by “easy” EU grants to growth driven by private investment and sustainable exports.
There is a fear of an “investment gap” if the private sector cannot take the baton from the state-led EU projects. Without this transition, the GDP growth rate could stall.
High cost of Living and “brain drain”
While macro-indicators (like debt-to-GDP) look better, the micro-economy—what people actually feel—remains strained.
Although general inflation may have stabilized, food and housing costs in Greece remain disproportionately high relative to wages.
Ironically, while unemployment has dropped, Greece faces a massive shortage of skilled workers in construction, tourism, and tech. Many of the most talented Greeks who left during the 2010s crisis (the “Brain Drain”) have not yet returned, hampering the country’s ability to innovate.
Productivity and the “small business” trap
The Greek economy is dominated by very small enterprises (SMEs) that often lack the scale to export or invest in R&D.
To remain competitive in 2026, Greek businesses need to merge or scale up.
While the state has digitalized rapidly, the private sector (especially traditional small businesses) still lags behind, making them vulnerable to more efficient international competitors.
Climate change and infrastructure vulnerability
As seen in recent years, Greece is on the frontline of the climate crisis.
Massive fires or floods (like the Daniel flood in Thessaly) create huge “unplanned” holes in the budget.
With 2026 likely seeing even hotter summers, the “sun and sea” model is under pressure. The economy must adapt to a “year-round” tourism model to avoid the risks of extreme heatwaves during the peak months of July and August