Acropolis of Athens. Credit: Greek Reporter
Swiss investment bank UBS has revised its growth forecast for Greece, lowering its 2025 GDP projection to 2.3% from 2.6%, while raising its 2026 outlook to 2.4% from 2.3%. The investment bank remains positive about Greece’s economic prospects, citing three main growth pillars: domestic consumption, investment potential, and tourism.
Despite this optimism, UBS warns that Greece’s economic resilience is likely to be tested in both the short and medium term due to a range of risks and challenges.
UBS forecast: Greece, it’s GDP, and short-term risks
The foremost short-term threat to Greece’s economy is tariff uncertainty and the potential impact on Eurozone growth. Approximately 65% of Greek exports to the United States are subject to mutual tariffs rather than sector-specific tariffs under Section 232.
UBS notes that any 10% increase or decrease in these tariffs could respectively reduce or boost GDP by 10 to 20 basis points. A 1% slowdown in Eurozone GDP could translate into a 1.1% negative impact on Greece’s GDP, although the effect may be mitigated by the role of Recovery and Resilience Facility (RRF) funds.
Natural disasters, including forest fires and floods, also pose risks, potentially affecting tourism, agriculture, and other key sectors, UBS says. Additionally, slower absorption and utilization of RRF funds could dampen short-term growth prospects.
Medium-term challenges
Looking beyond 2025, in addition to its GDP forecast, UBS identifies several structural challenges for Greece:
The growth boost from RRF funding is expected to fade after 2027, with traditional EU Cohesion and Agricultural Funds unlikely to provide the same stimulus for Greece.
Tourism-related issues, such as short-term rental restrictions and cruise taxes, may hinder sector activity.
Investment-to-GDP ratios and labor productivity remain low, limiting potential for sustained growth.
UBS’s analysis and GDP forecast underscores the dual nature of Greece’s outlook: while short-term prospects are supported by consumption, tourism, and investment inflows, persistent structural and external risks pose significant challenges to medium-term economic stability.