Greek budget forecasts continued growth, further rise in investment spending

Parliament has approved the 2026 government budget that projects continued strong growth, increased investment spending and higher budget surpluses despite uncertainty in the global economic environment.

According to the government budget, the Greek economy is expected to continue expanding at a significantly faster rate than the rest of the eurozone – for the sixth consecutive year – driven by increased public and private investment. Growth is seen at 2.4% next year, double the 1.2% rate forecast for the euro area, with investment spending projected to rise 10.2% in 2026, supported by public investment spending of €16.7 billion.

“The start of the year 2026 will find the Greek economy in conditions of continued dynamic growth, in an international environment that continues to be governed by geopolitical uncertainty, by changing conditions in global trade and energy markets as well as by risks to fiscal and political stability in major European economies,” wrote Finance Minister Kyriakos Pierrakakis in submitting the budget to Parliament. “Despite the uncertainty in the global economic environment, the Greek economy is projected to continue for the sixth consecutive year to record a significantly higher real growth rate than the Eurozone average.”

With both public and private investment growing, Greece is fast closing the gap in its investment ratio with the rest of Europe. Overall, investment in 2026 is expected to reach 17.7% of GDP, which is the highest ratio since 2009, the year before the financial crisis. By comparison, the average investment ratio in the eurozone is 21%.

Also significant: efforts to crack down on tax evasion and better-than-expected revenue collections are expected to yield a primary budget surplus equal to 3.7% of GDP next year following significant outperformance this year. The improved budget outcome has, among other things, allowed the Greek government to continue paying off its debt obligations ahead of schedule. As a result, public debt is seen declining from a ratio of 145.9% of GDP this year to 119% by 2029, representing the fastest decline in public debt in Europe.