Greek economy resilient, but challenges persist
Christina Papaconstantinou, Deputy Governor of the Bank of Greece, highlighted the Greek economy's strengthened resilience and achievements, while acknowledging persistent external risks and structural challenges at an ECB meeting.
Resilience built on strong fundamentals
The Greek economy has significantly strengthened its resilience, outperforming the euro area average with 2.1 percent GDP growth in 2025 for the fifth consecutive year.
Investment now contributes more to growth than private consumption, with the investment-to-GDP ratio reaching a 16-year high and productive investment at a three-decade high.
Labor market conditions have also improved, with the unemployment rate falling to 8.9 percent in 2025, its lowest in 16 years, and increased labor force participation.
Fiscal performance remains robust, marked by a 4.9 percent primary surplus and a sharp decline in public debt to 146.1 percent of GDP, reinforcing fiscal credibility.
Banking sector turnaround
Progress is evident in the financial sector, where banks have improved profitability, capital, and liquidity.
Non-performing loans (NPLs) have declined significantly, converging with the average for significant institutions in the Banking Union.
All Greek significant banks have achieved investment grade status, renewing investor interest, as seen in foreign investment in capital instruments and the acquisition of a third of Alpha Bank's share capital by Unicredit.
The restructuring of less significant banks (LSIs) has addressed crisis legacies, enhancing competition.
Credit servicers manage approximately 91.5 billion euros in non-performing private debt, crucial for economic growth and obligor rehabilitation.
Momentum needs sustained reform
While the Greek economy has demonstrated remarkable resilience, its growth is projected to moderate to 1.9 percent in 2026, facing persistent inflationary pressures and an elevated current account deficit.
Beyond external risks, deep-seated structural constraints, including a persistent investment gap, bureaucratic complexity, and skill mismatches, continue to hinder long-term productivity and competitiveness.
Sustaining the positive momentum requires a coherent strategy centered on investment, innovation, and continued institutional reforms to unlock the economy's full potential.