Greece Inflation Stays Near 4% Through 2026

That matters for investors because Greece is still growing faster than the eurozone average, but the inflation gap remains a drag on real incomes, margins and policy flexibility. IOBE said unemployment should fall to 8.6% in 2026 and 7.8% in 2027, while domestic demand and tourism remain resilient, helping offset some of the strain from imported price pressures.

The institute’s comments also point to a familiar tension for the Greek economy: solid momentum on one side, persistent structural weaknesses on the other. IOBE President Yiannis Retsos said fiscal stability is essential for keeping investor confidence on track, while Managing Director Nikos Vettas warned that uncertainty remains high because of the wars in Ukraine and the Middle East, as well as political shifts in the EU and the U.S.

Vettas said Greece’s economy is stable and still outpacing the eurozone, but he flagged higher-than-eurozone inflation, a weak investment mix, an external deficit and low productivity as medium-term constraints. He also pointed to the burden of bad debt, adverse demographics and the financing gap left by the financial crisis.

For policymakers, the message is that targeted support may be preferable to broad subsidies if inflation stays sticky. For markets, the outlook suggests Greece can keep expanding, but the path to stronger valuation rerating will depend on whether fiscal discipline, investment and productivity gains can outpace the next wave of energy-driven price pressure.