The assessment was included in the preliminary findings of the IMF mission to Greece released on Tuesday.
According to the IMF, economic growth in Greece remains relatively strong and is being driven mainly by domestic demand, investment financed through the European Union’s Recovery and Resilience Fund and private consumption. Greece’s real GDP grew by 2.1% in 2025, while tourism reached a new record and unemployment continued to decline, falling to 8.3% by the end of the year, close to levels seen before the global financial crisis. Inflation remained relatively high, standing at 3.1% in February 2026, while the current account deficit narrowed but continues to be considered a structural weakness due to strong demand for imports.
The IMF also noted that Greece’s fiscal position has improved significantly in recent years. Despite increased public investment and government support measures for households, the country maintained a strong primary budget surplus in 2025, while public debt as a percentage of GDP continued to decline rapidly. Public debt is estimated to have fallen to around 145% of GDP in 2025, down from approximately 210% in 2020, and is expected to continue declining over the coming years.
In the banking sector, the Fund found that Greek banks have significantly strengthened their balance sheets, with non-performing loans falling to historically low levels and capital positions remaining strong. Lending to the private sector has started to increase, mainly to businesses, while mortgage lending has also begun to grow for the first time in many years, largely due to subsidised housing loan programmes. Although bank profitability has declined slightly due to falling interest rates, it remains above the European Union average.
However, the IMF warned that the outlook for the Greek economy is overshadowed by global developments, particularly the crisis in the Middle East, high energy prices and a slowdown in the global economy. Growth is expected to slow to around 1.8% in 2026 and to stabilise at approximately 1.5% in the medium term, mainly due to demographic pressures, low productivity and limited labour force participation.
The Fund stressed that risks to the economic outlook are mainly on the downside. A prolonged geopolitical crisis, further increases in energy prices, financial market volatility or delays in reforms and investment projects could negatively affect growth. On the other hand, if reforms and fiscal measures perform better than expected, the economy could grow faster than currently projected.
The IMF also emphasised that fiscal policy should remain supportive of growth but prudent, in order to ensure continued reduction of public debt. Tax cuts were seen as positive because they support disposable income and employment, particularly for young people and families with children. At the same time, support measures to offset high energy prices should remain targeted and temporary so as not to place excessive pressure on public finances.
The Fund also highlighted the importance of fully utilising European funds to maintain high levels of public investment and support private sector activity. Despite the progress made in recent years, Greece still faces an investment gap compared with the eurozone average, which affects productivity and long-term growth.
The housing market was also identified as an area of concern, as property prices rose significantly in 2025 due to strong demand, limited supply and low levels of new construction. The IMF recommended policies aimed at increasing housing supply, including the use of vacant properties, renovation programmes, support for long-term rentals and faster development of social housing.
Greek Finance Minister Kyriakos Pierrakakis described the IMF’s annual Article IV report as very positive, saying it confirms that Greece is better prepared to cope with international instability and external economic shocks while maintaining growth and strengthening household purchasing power.
