Greece’s Growth Projected to Remain Steady in 2025, Draft Budget Indicates

By Lefteris Papadimas

ATHENS (Reuters) – The Greek government is projecting an economic growth rate of 2.3% for 2025, positioning itself ahead of other major European economies. This optimistic outlook is driven by strong tourism revenues, healthy consumer spending, and investment, as indicated by the draft budget released on Monday.

As Greece continues to recover from the debt crisis that nearly led to its exit from the eurozone in 2015, the government anticipates a 2.2% increase in economic output this year.

In April, officials revised their previous growth estimate for 2025 down from 2.6%, citing a stagnating European economy—a critical source of investment and tourism—as well as high inflationary pressures.

The draft budget aligns with Athens’ fiscal strategy revealed last week, which has been submitted for approval to the European Union. It highlights potential risks associated with conflicts in Ukraine and the Middle East, alongside possible new geopolitical tensions.

More than half of Greece’s foreign direct investment originates from northern European countries, while two-thirds of the nation’s exports, including agricultural products, fuel, and pharmaceuticals, are sent to the EU.

Next year’s budget outlines an increase in spending of approximately 3.5 billion euros and introduces tax breaks aimed at funding pension increases and assisting vulnerable households. This financial plan will be supported by a projected increase in the primary budget surplus, expected to reach 2.5% of GDP in 2025, slightly up from 2.4% this year. This surplus is crucial for maintaining the sustainability of Greece’s public debt, which is currently the highest in the eurozone relative to GDP.

Since exiting a bailout in 2018, Greece has regained its investment grade ratings and revitalized its banking system, now relying exclusively on debt markets for borrowing. However, the unemployment rate remains at 10%, and the average monthly salary has decreased by 20% compared to 15 years ago.

Public debt is projected to decrease by five percentage points to 149.1% of GDP in 2025, down from 153.7% this year.