Greece sees construction surge and inflation slowdown as banks face tax‑deferral debate

Construction activity in Greece accelerated sharply in early 2026. Official statistics show a 14.4 % rise in building permits in the first quarter, with March 2026 records indicating a 22 % increase in permits and a 40‑plus % jump in built‑area and volume compared with the same month a year earlier.

Retail sales turned up 4 % in April, driven mainly by higher prices rather than genuine volume growth, while the Producer‑Price Index surged 13.5 % in May, reflecting strong external market influences.

Consumer‑price inflation eased in June, falling to 3.9 % year‑on‑year (Eurostat flash estimate), down from 4.9 % in May, though still above the Eurozone average of 2.8 %. Energy‑price pressures eased, with energy inflation dropping to 8.7 % from 10.8 %.

The Bank of Greece warned against an accelerated write‑off of banks’ deferred tax assets, saying it would erode capital buffers and threaten financial stability. Moody’s noted two legal risks linked to the Katselean law but concluded that Greek banks’ strengthened capital positions should absorb any extra costs.

DEI reported payments of €27.76 million to the state for lignite‑related obligations in 2025. Bank of America described Greece’s equity market as moving into a more mature phase, highlighting a high equity‑risk premium (≈10 %) and continued foreign‑fund inflows despite higher valuation multiples.

Greek households spent a record €3.3 billion abroad in 2025, up 19 % year‑on‑year, reflecting revived travel demand and higher per‑day spending, especially within the Eurozone.