Greece’s Economy in 2025: Growth Amid Global Uncertainties

12:54 20/1/2025 - Πηγή: Dikaiologitika

Greece is expected to achieve a robust growth rate of 2.5% in 2025.

The Greek economy is poised to sustain its growth momentum in 2025, as projected by the European Commission's latest forecasts. However, global uncertainties cast a shadow over the economic landscape. The policies of the new

Trump administration in the United States inject unpredictability into global trade and economic relations, while the ongoing fragmentation of the Eurozone poses serious risks to regional stability. Compounding these challenges, Germany, the economic linchpin of the Eurozone, grapples with a political crisis that adds further strain to the region, emphasizing the need for heightened vigilance and adaptability in economic planning.

Despite these external headwinds, Greece is expected to achieve a robust growth rate of 2.5% in 2025. This expansion is underpinned by strong private investments, growing exports, and the continued rollout of the Recovery and Resilience Facility. Private consumption is projected to remain steady, though rising energy and commodity prices may temper growth prospects. Inflation is anticipated to ease to 2.4%, providing much-needed relief to households and businesses, while unemployment is set to fall to 10.0%, buoyed by gains in tourism, services, and manufacturing.

Nevertheless, the international environment presents significant risks to Greece's economic stability. Potential shifts in trade policies and international relations under the Trump administration could disrupt global markets, with ripple effects across Europe. Closer to home, the political instability in Germany undermines confidence in the Eurozone's cohesion, raising questions about the future of economic integration. For Greece, these uncertainties underscore the importance of crafting a resilient and adaptable economic strategy.

Investment prospects remain promising, fueled by European funding for infrastructure, digital transformation, and workforce development. However, bureaucracy and delays in project implementation continue to hinder progress. Reinvigorating foreign investment, which experienced a downturn in 2024, will require decisive reforms aimed at enhancing transparency and creating a more business-friendly environment.

The labor market is steadily improving, with unemployment expected to decline further. However, structural challenges such as an aging population, skill mismatches, and a continued talent exodus limit the economy's long-term potential. Policies to increase female workforce participation, integrate migrants, and promote lifelong learning are crucial to addressing these issues. Meanwhile, enhancing competitiveness—especially in the face of high energy costs—remains a top priority for achieving sustainable growth.
Fiscal stability remains a cornerstone of Greece's economic outlook. The primary surplus of the state budget for 2024 reached €8.629 billion, far surpassing the €4.635 billion target set for the 2025 Budget and significantly outpacing the €3.920 billion recorded in 2023. The overall budget balance also showed a surplus of €300 million, a stark contrast to the projected €3.6 billion deficit. These results reflect the government’s prudent fiscal management and the successful execution of revenue and expenditure policies.
However, challenges persist. Public debt, while on a downward trajectory, is expected to remain high at 146.8% of GDP in 2025. Sustaining investor confidence will require maintaining fiscal discipline and optimizing resource allocation. Tax reforms, anti-tax evasion initiatives, and investments in green and digital sectors can provide additional revenue streams to support long-term economic resilience.

Energy remains a critical challenge for Greece. High energy costs continue to strain competitiveness, underscoring the urgency of accelerating renewable energy projects, strengthening links to European energy networks, and reducing dependence on fossil fuels. Addressing this issue will be pivotal for securing Greece's economic future and fostering sustainable growth.

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