National Economy and Finance Minister Kyriakos Pierrakakis.
The forecasts of the 2026-2029 Multiannual Financial Framework (MFF), that National Economy and Finance Minister Kyriakos Pierrakakis and his deputy Thanos Petralias presented to the cabinet on Thursday, confirmed economists’ concerns that the Greek economy will slow down after the end of the Recovery Fund in 2026.
The framework predicts the growth rate to decline from the projected 2.4% in 2026 to 1.7% in 2027, 1.6% in 2028 and 1.3% in 2029. This means that convergence with the European Union will probably slow down if the EU remains in the 1.2-1.3% range, where it is expected to be this year and next.
The slowdown is apparently a result of the decline in investments, to a large extent. The government predicts an increase of 10.2% this year and then a decline in the rate to 4.1% in 2027, 0.9% in 2028 and 0.8% in 2029. That is normal, since the 7.192 billion euros of investment spending of the Recovery Fund in 2026 will not exist in the coming years. The projected increase in the Public Investments Program, national and co-financed (from €9.5 billion in 2026 to €11.75 in 2029), is not enough to cover this gap.
Therefore, as the Hellenic Fiscal Council says in its opinion on the MFF, “the expected slowdown in the growth rate of real GDP, especially after 2027, makes it necessary to strengthen structural policies on the supply side, with the aim of increasing productivity, expanding the export base and strengthening the resilience of the business sector, in order to maintain the growth momentum of the Greek economy.”
Moreover, the council highlights medium-term challenges for the economy. “In the medium term,” it states, “the Greek economy continues to face significant structural challenges. Hourly labor productivity and real wages remain among the lowest in the EU, while GDP per capita corresponds to only 70% of the European average.”
The ministry points out that the growth rates mentioned do not include possible new interventions that will be announced for the years 2027-2029, implying that these will lead to faster GDP growth.
Inflation is expected to be in the range of 2.2-2.3% in 2026-2029 and average unemployment to fall to levels below 8% at the end of the four-year period.