Greece Growth Faces Risks from War, Energy Crisis

Greece’s economical betterment remains connected track, but mounting planetary risks—particularly geopolitical instability and vigor uncertainty—could endanger its maturation outlook, according to Yannis Stournaras, politician of the Bank of Greece.

Speaking astatine an lawsuit successful Frankfurt, Stournaras highlighted the country’s advancement since its indebtedness crisis, noting that sustained fiscal discipline, fiscal restructuring, and structural reforms person helped reconstruct economical credibility and laic the instauration for semipermanent growth. However, helium warned that outer shocks could rapidly undermine this trajectory.

War and vigor risks successful focus

A cardinal interest is the ongoing struggle successful the Middle East, which Stournaras described arsenic a imaginable source of “stagflationary” pressures—combining higher ostentation with weaker economical growth—if it persists oregon escalates.

He stressed that the struggle represents a antagonistic supply daze for some the planetary system and the eurozone, peculiarly done its interaction connected vigor markets. A prolonged situation could trigger a caller vigor shock, intensifying inflationary pressures and weighing connected economical activity.

Strong performance, but fragile environment

Despite these risks, Greece has posted solid economical results successful caller years. Growth has consistently outpaced the eurozone mean since 2019, with existent GDP expanding by 2.1% successful some 2024 and 2025—well supra the eurozone’s 1.4% average.

Economic enlargement has been driven by backstage consumption, investment, and exports. Investments surged by 8.9% successful 2025, supported successful portion by European betterment funds, while exports remained resilient contempt a challenging planetary environment.

The labour marketplace has besides improved significantly, with unemployment falling to 8.9% successful 2025—the archetypal clip it has reached single digits since the indebtedness crisis. Rising incomes and reduced poorness levels bespeak that the betterment is progressively translating into tangible benefits for households.

Public finances and concern momentum

Stournaras emphasized that Greece’s betterment is underpinned by strong fundamentals alternatively than short-term stimulus. The state continues to station solid fiscal surpluses while maintaining alignment with EU fiscal rules.

Public indebtedness is steadily declining arsenic a stock of GDP and is expected to autumn to astir 138% by 2026, supported by economical maturation and favorable financing conditions. Credit standing upgrades person besides boosted capitalist assurance and attracted overseas capital.

Looking ahead, maturation is expected to stay stable successful 2026—provided the geopolitical situation does not deteriorate further and vigor prices ease. Consumption is projected to stay the main driver, with investments continuing to play a supportive role.

Structural challenges remain

Despite the progress, respective home challenges persist. These see precocious backstage debt, demographic pressures, and comparatively debased labour unit information among women and young people. Delays successful judicial and administrative reforms besides proceed to weigh connected the concern environment.

Rising lodging costs are different increasing interest for households, adding unit to surviving standards.

The way forward

Stournaras underlined that Greece’s adjacent signifier should absorption connected accelerating maturation done accrued investment, productivity gains, and continued reforms. Closing the concern spread with the eurozone and attracting backstage superior will beryllium cardinal priorities.

He besides stressed the value of leveraging greenish and integer transitions arsenic opportunities alternatively than obligations. Expanding renewable energy, upgrading infrastructure, and investing successful innovation are seen arsenic captious steps toward enhancing semipermanent competitiveness.

At the aforesaid time, reducing dependence connected imported fossil fuels has go much urgent successful airy of the latest vigor crisis.

Ultimately, Stournaras concluded, maintaining fiscal discipline, governmental stability, and betterment momentum will beryllium indispensable for Greece not lone to sustain its betterment but to physique a much resilient and competitory system successful an progressively uncertain planetary environment.

Source: tovima.com