{"id":226327,"date":"2025-10-15T11:03:13","date_gmt":"2025-10-15T11:03:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/226327\/"},"modified":"2025-10-15T11:03:13","modified_gmt":"2025-10-15T11:03:13","slug":"imf-lowers-greeces-growth-forecast-to-2-debt-and-reforms-remain-key","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/226327\/","title":{"rendered":"IMF Lowers Greece\u2019s Growth Forecast to 2%, Debt and Reforms Remain Key"},"content":{"rendered":"

\"The<\/p>\n

The International Monetary Fund announced that the Greek economy will grow by 2% in 2025. Credit: Flickr \/ Simon D. McCourtie \/ CC BY-NC-ND 2.0<\/p>\n

The International Monetary Fund (IMF) has lowered its forecast for Greece<\/a>\u2019s economic growth this year to 2%, down from 2.3% earlier in 2024. In its autumn economic outlook, the Fund maintains a medium-term growth projection of 2% in 2026, reflecting expectations of moderate but steady expansion.<\/p>\n

Inflation<\/a> is projected to edge higher to 3.1% in 2024, before easing to 2.5% by 2026, while Greece\u2019s current account deficit is expected to remain in negative territory\u2014-5.8% of GDP in 2025 and -5.3% in 2026.<\/p>\n

Unemployment is forecast to continue its gradual decline, reaching 8.4% in 2026, signaling an improving labor market despite tighter growth prospects.<\/p>\n

Debt remains a defining constraint<\/p>\n

While the IMF<\/a> acknowledges that Greece<\/a> has firmly exited its bailout programs, it stresses that the country remains one of Europe\u2019s most indebted economies<\/a>\u2014a key factor that still shapes credit ratings and market confidence.<\/p>\n

Greece is grouped among the IMF\u2019s \u201cEuropean debtors,\u201d alongside Cyprus, Ireland, Portugal, and Spain\u2014countries that have rebounded from financial crises yet still carry high debt loads. The Fund notes that maintaining fiscal discipline and reform continuity remains essential to safeguard credibility and prevent vulnerabilities from resurfacing.<\/p>\n

April Review: Strong recovery, enduring reforms needed<\/p>\n

The IMF\u2019s April 2024 Article IV review had painted a more optimistic near-term picture, highlighting robust growth, strong investment, and a resilient labor market. The Fund described Greece\u2019s short-term outlook as \u201cfavorable,\u201d crediting the country\u2019s post-crisis transformation and effective policy management.<\/p>\n

Back in April, the IMF projected 2.1% GDP growth for 2025, driven primarily by investment projects funded through the EU\u2019s Recovery and Resilience Facility<\/a> (NextGenerationEU). Rising employment and household incomes were also expected to support private consumption and sustain domestic demand.<\/p>\n

However, the Fund warned that as EU recovery funding gradually tapers off, Greece will need to rely more on structural reforms and private investment to maintain momentum. It cautioned that \u201ccontinued fiscal vigilance\u201d and ambitious policy reforms are critical for ensuring long-term stability and sustainable growth.<\/p>\n

Inflation pressures and external risks<\/p>\n

The April report also pointed to persistent core inflation, particularly in services, fueled by rising wages and strong domestic demand. The IMF identified external risks such as slower eurozone growth, geopolitical tensions, and global policy uncertainty, all of which could dampen Greece\u2019s medium-term prospects.<\/p>\n

The Fund urged the government to maintain policy flexibility and to press ahead with structural reforms that enhance competitiveness, productivity, and labor market efficiency. It warned that faster wage growth, if not matched by productivity gains, could prolong inflationary pressures.<\/p>\n

Banking system strengthened, but monitoring needed<\/p>\n

The IMF\u2019s spring review praised the resilience of Greece\u2019s banking system, noting a sharp decline in non-performing loans (NPLs) to around 3%, alongside strong profitability and capital adequacy. Liquidity risks have also receded, with buffers well above supervisory thresholds and EU averages.<\/p>\n

Nonetheless, the Fund highlighted remaining pockets of vulnerability stemming from rapid credit expansion and exposure to real estate. It welcomed the activation of the countercyclical capital buffer (CCyB) and borrower-based housing measures, urging regulators to continue monitoring potential financial risks as credit conditions evolve.<\/p>\n

Fiscal and structural reforms at the core of stability<\/p>\n

The IMF commended Greece\u2019s fiscal consolidation, supported by stronger revenues and reforms to combat tax evasion. It recommended maintaining primary surpluses above 2% of GDP over the medium term to reinforce debt sustainability.<\/p>\n

The Fund also called for prioritizing public investment in green and digital transitions, improving the efficiency of social spending, and containing public sector wage and pension growth. It urged continued efforts to boost labor force participation, especially among women, and to reduce regulatory barriers that hinder entrepreneurship and competition.<\/p>\n

Judicial reforms were also deemed vital for enhancing investor confidence and improving the business environment. The IMF further encouraged Greece to stay on course with its green and digital transformation, viewing them as key pillars for future competitiveness.<\/p>\n

A cautious but constructive outlook<\/p>\n

Taken together, the IMF\u2019s autumn update and April review outline a consistent message: Greece\u2019s recovery is resilient but still vulnerable<\/a>.<\/p>\n

Yet, the IMF emphasizes that sustained reform, disciplined fiscal management, and structural modernization remain essential for Greece to secure durable, inclusive, and long-term growth.<\/p>\n","protected":false},"excerpt":{"rendered":"The International Monetary Fund announced that the Greek economy will grow by 2% in 2025. Credit: Flickr \/…\n","protected":false},"author":2,"featured_media":99964,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-226327","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/226327","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=226327"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/226327\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/99964"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=226327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=226327"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=226327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}