IMF Executive Board Concludes 2025 Article IV Consultation with Greece
IMF News, April 4, 2025
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- Published: April 4, 2025
Overview
- The Executive Board concluded the Article IV consultation with Greece on March 31, 2025.
- Greece's near-term economic outlook is described as favorable with continued robust expansion of real GDP.
Near-term outlook and projections
- Real GDP growth:
- 2024: 2.3 percent (est.)
- 2025: 2.1 percent (proj.)
- 2026: 1.9 percent
- Drivers:
- Investment remains a key driver, supported by NGEU-funded projects.
- Private consumption growth underpinned by favorable employment and income growth.
- Inflation:
- CPI inflation (period avg., percent): 2024: 3.0; 2025: 2.5
- Headline inflation expected to resume downward trend with stabilizing global energy prices.
- Core inflation expected to be more persistent due to services inflation and wage growth.
Banking system and financial sector resilience
- Non-Performing Loan ratio in systemically important banks: around 3 percent.
- Banks have:
- Sustained high profits.
- Issued capital instruments that have boosted capital adequacy.
- Liquidity and funding buffers well above prudential requirements and the EU average.
- Policy guidance from Directors:
- Close monitoring of risks associated with accelerating credit growth and credit exposure.
- Activation of a positive neutral countercyclical capital buffer and borrower-based measures for mortgage loan borrowers welcomed.
- Recommendation to calibrate macroprudential toolkits to align with emerging risks.
- Elevated bank profits should be primarily utilized to enhance capital buffers and loss-absorption capacity.
Public finances and debt sustainability
- Public finance indicators (percent of GDP):
- Revenue: 2024: 49.2; 2025: 49.4; 2026: 49.8
- Expenditure: 2024: 49.5; 2025: 49.9; 2026: 49.8
- Overall balance: 2024: -0.3; 2025: -0.5; 2026: -0.6
- Primary balance: 2024: 2.9; 2025: 2.4
- Public debt 1/: 2024: 150.8; 2025: 142.4; 2026: 138.0
- Directors’ recommendations:
- Maintain primary surpluses above 2 percent of GDP in the medium term to enhance debt sustainability and build buffers.
- Prioritize public investment, including for the green transition and energy security.
- Improve social expenditure efficiency and contain spending pressures, especially on pensions and public-sector wages.
- Continue reforms that reduce tax evasion (noted as contributing to strong revenue performance).
Structural reforms and growth-enhancing policies
- Directors highlight remaining crisis legacies and structural imbalances as impediments to medium-term growth.
- Recommended structural priorities:
- Raise labor force participation, particularly for women.
- Cultivate a better-skilled workforce.
- Reduce regulatory burdens and barriers to entry for firms, especially in services.
- Advance judicial system reforms to address crisis legacy debt and enhance business dynamism and productivity.
- Continue progress in green and digital transitions to support energy security and productivity.
Risks to outlook
- Risks to growth: balanced.
- Potential headwinds: growth slowdown in major euro area countries; deterioration of regional conflicts; global policy uncertainty.
- Acceleration of ambitious structural reforms could improve growth prospects.
- Risks to inflation: tilted upward.
- Stronger- and more persistent-than-expected wage growth could further fuel services inflation.
- Fluctuations in global and regional energy prices could exacerbate inflation pressures.
Key statistics and memorandum items
- Population (millions): 10.4
- Per capita GDP (€'000): 22.9
- IMF quota (millions of SDRs): 2,428.9
- Literacy rate (percent): 97.9
- (Percent of total): 0.51
- Poverty rate (percent): 26.1
- Main products and exports: tourism and shipping services; food and beverages; industrial products; petroleum and chemicals.
- Key export markets: EU (Italy, Germany, Cyprus, Bulgaria, Spain), Turkey, Lebanon, USA, UK.
- GHG emissions per capita (tons of CO2 equivalent): 6.3
- Balance of payments (percent of GDP):
- Current account 2/: 2024: -6.9; 2025: -6.6; 2026: -6.1
- FDI: 2024: -1.8; 2025: -1.6
- External debt: 2024: 238.9; 2025: 232.5; 2026: 227.1
- Exchange rate:
- REER (percent change) 3/: 2024: 0.0
- Memorandum item:
- Nominal GDP (billions of euros): 2024: 237.6; 2025: 248.4; 2026: 258.7
Source: IMF Executive Board Concludes 2025 Article IV Consultation with Greece (April 4, 2025).
