Greece's growth outlook brightens after US‑Iran peace deal

The Bank of Greece raised its GDP growth forecast to 2.0% for 2026 and 2.1% for 2027‑2028, citing the recent US‑Iran peace agreement that lowers geopolitical risk. Inflation is projected to ease to 3.7% in 2026, then 2.5% in 2027 and 2.2% in 2028. The central bank also highlighted a primary surplus equal to 4.9% of GDP in 2025 and a debt‑to‑GDP reduction of eight percentage points to 146.1%.

Tourism revenues demonstrated resilience: April receipts reached €1.1 billion, a 9.5% increase year‑on‑year, and the first‑quarter total climbed to €2.8 billion, up 37% compared with the same period last year.

Despite the optimistic outlook, consumer price inflation remains elevated, at 4.9% in May 2026—the highest in 38 months—and well above the Eurozone average. Energy and food prices continue to drive the price increase, with energy inflation around 20%.

Analysts note that the outlook depends on the durability of the US‑Iran pact; a reversal of the agreement or a wider regional conflict would re‑introduce uncertainty. Other risks include persistent inflationary pressures, rising protectionism and climate‑related shocks.