IMF Executive Board Concludes 2026 Article IV Consultation with Greece

IMF News, May 27, 2026

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Published: May 27, 2026

Summary

Greece met the shock from the war in the Middle East with strengthened fiscal sustainability and financial stability.
The right macroeconomic and financial policy mix would help preserve macro-financial stability and foster balanced and sustainable growth in the medium term.
Ambitious structural reforms, along with completing the EU Single Market, would support growth sustainably at a high level and reduce the persistent current account deficit.
The authorities have consented to the publication of the Staff Report prepared for this consultation.
The 2026 Financial Sector Assessment Program (FSAP)—the first since 2006—finds that systemic risks in the financial sector were low prior to the war and remain manageable.

Growth and outlook

GDP growth is projected to soften to 1.8 percent in 2026.
Growth drivers: higher public investment and household support measures.
Headwinds: elevated energy prices and weaker external demand stemming from the war, weighing on private consumption and tourism.
Medium-term forecast: growth is forecast to ease to 1½ percent, reflecting a declining working age population, low labor force participation, and sluggish productivity growth.
Risks: tilted downward, especially from a protracted war, escalation of geopolitical tensions, and trade fragmentation; domestic risk includes delays in the execution of NGEU-funded projects.
Inflation upside risks: further rises in commodity prices, wage growth outpacing labor productivity, and higher costs associated with climate shocks.

Fiscal position and public debt

Recent reforms to reduce tax evasion have broadened the tax base and reduced informality, creating some space to support households’ disposable income while ensuring a rapid public debt reduction.
Directors commended continued very strong fiscal performance underpinned by reforms to reduce tax evasion, supporting a sustained reduction in public debt and providing room for temporary measures to mitigate higher energy prices.
Policy guidance:
- Maintain primary surpluses.
- Make full use of available EU funds to sustain public investment beyond NGEU.
- Focus on efficient public investment and safeguard social spending.
- Ensure energy price responses are well targeted, temporary, and preserve price signals.
- Further advance fiscal structural reforms to enhance fiscal policy effectiveness.

Financial sector and stability

2026 FSAP finds systemic risks were low prior to the war and remain manageable.
Banking system demonstrates resilience under stress tests.
Directors’ recommendations:
- Closely monitor common exposures to large firms.
- Improve resolution of legacy distressed debt outside the banking system and strengthen supervision of credit servicers.
- Strengthen crisis preparedness and the financial safety net.
- Continue enhancing the quality of bank capital.
- Consider additional macroprudential buffers to bolster resilience while avoiding procyclicality.

Structural reforms and competitiveness

Directors emphasized ambitious structural reforms to support higher, more inclusive, and productivity-driven growth and reduce persistent current account deficits.
Recommended reforms:
- Advance digital transformation.
- Further reduce regulatory and administrative burdens to promote competition and boost productivity.
- Raise labor force participation and improve workforce skills to counter demographic pressures.
- Complete the EU single market to raise productivity and improve economic resilience.
- Implement housing policies to mobilize existing supply more effectively, complemented by well-calibrated demand measures, to improve housing affordability.
- Take steps to achieve energy security.

Executive Board assessment

Directors welcomed solid macroeconomic growth, restored fiscal credibility, and financial stability.
They noted incomplete private sector balance sheet repair and remaining structural impediments that weigh on medium-term growth and external balances.
Directors called for the right macroeconomic and financial policy mix and completion of the structural reform agenda to lock in stability, lift supply constraints, and secure balanced and sustainable growth.

Selected economic indicators (as reported)

Population (millions): 10.4
Per capita GDP (€'000): 23.9
IMF quota (millions of SDRs): 2,428.9
Literacy rate (percent): 98.0
(Percent of total): 0.51
Persons at risk of poverty (percent): 19.6
GHG emissions per capita (tons of CO2 equivalent): 6.3

Key export markets: EU (Italy, Germany, Cyprus, Bulgaria, Romania, Spain), USA, UK. Main products and exports: tourism and shipping services; food and beverages; petroleum and chemicals.

2025 / 2026 / 2027 (proj.)

Real GDP growth (percent): 2.1 / 1.8 / 1.7
Unemployment rate (percent): 8.9 / 7.4 / 7.1
CPI inflation (period avg., percent): 2.9 / 3.5 / 2.7

General government finances (percent of GDP)

Revenue: 50.0 / 49.9 / 48.7
Expenditure: 48.3 / 49.5 / 49.0
Overall balance: 0.4 / -0.3 / (no figure for 2027 shown)
Primary balance: 4.9 / 3.6 / 3.0
Public debt: 146.6 / 136.6 / 130.1

Balance of payments

Current account (percent of GDP): -5.7 / -6.4 / (no figure for 2027 shown)
FDI (percent of GDP): -2.7 / -1.0 / (no figure for 2027 shown)
External debt (percent of GDP): 237.7 / 230.6 / 226.8

Exchange rate

REER (percent change) 1/: 1.6 / …

Memorandum item:

Nominal GDP (billions of euros): 248.4 / 260.8 / 272.2

Sources cited in the release: Greek authorities; World Bank, World Development Indicators; Eurostat; IMF, International Finance Statistics, Direction of Trade Statistics, and IMF staff projections.

Press Release No. 26/169. May 27, 2026. IMF Communications Department.