Despite the slowdown of the international economy and the increase in geopolitical uncertainty with the tension in the Middle East, the Budget office of the House in his quarterly report, only downgrades his prediction for the development this year.
Specifically, the Budget Office stipulates that in 2025 it will close with GDP growth by 2.2% (compared to 2.3% as a previous provision, with growth mainly based on private consumption and exports. However, the report itself emphasizes that maintenance of the development of the development depends on three basic conditions: Recovery and acceleration of internal reforms.
In the field of public finances, the image is more stable. Maintaining primary surpluses and debt decline are the foundations on which the strengthening of investment trust and the attraction of capital can be supported. The report links the continuation of positive evaluations by credit ratings with the need for consistency in fiscal policy.
However, external risks do not allow complacency. The new US tariff policy, which has characteristic unilateral protectionism, is expected to affect economic activity in the EU and Greece, mainly through exports. At the same time, the new ignition in the Middle East creates conditions for new inflationary pressures and disruption to financial markets.
In this context, the report highlights the need for targeted interventions in the most vulnerable export sectors, supporting businesses extending to new markets and activation of tools such as Export Credit Greece, so that the Greek economy can enhance its extroversion and withstand a possible worldwide environment.
Growth rate and inflation
GDP recorded a 2.2% increase in the first quarter of 2025 compared to the corresponding period of 2024, according to ELSTAT temporary data. This performance exceeds the corresponding average of the eurozone (1.5%) and is mainly based on private consumption (+1.9%), public consumption (+0.7%) and exports of goods and services (+2.2%).
On the other hand, fixed capital investments fell 3.2%, and imports increased by 2.4%, burdening the trade balance. The forecast for the annual GDP increase in 2025 is slightly revised down to 2.2%, from 2.3% in the March report.
At the same time, inflation still insists. In May it stood at 3.3%, ie above both 2.4% of last year and from 2.6% of April. The main pressures come from services (housing, etc.) and food, while the report highlights the need to intensify measures against oligopoly pricing practices.
At the level of fiscal management, the picture is positive. The general government’s budgetary outcome for 2024 stood at a surplus of € 3.18 billion (1.3% of GDP), while the primary surplus amounted to € 11.4 billion (4.8% of GDP).
For the four months of January – April 2025, the consolidated primary surplus reached 4.93 billion euros, up 1.57 billion compared to the same period last year. At the same time, the state budget recorded a surplus of € 5.15 billion, increased by € 1.86 billion.
Tax revenue increased significantly, mainly due to:
- Income Tax: +1.35 billion euros
- VAT: +708 million euros
The expenditure is a decrease of EUR 1.58 billion, which is attributed to the lower execution of the RIP and the TAA, but also to the reduction of interest and primary expenditure.
Investment level, banks and obstacles
The upgrading of the country’s credit rating by Standard & Poor’s in the investment level was accompanied by an increase in European participation in the Greek banking system, a development that is considered a supportive to attract foreign capital and cross -border cooperation in the future.
The report does not fail to record the clouds on the horizon: Delays in the implementation of the recovery fund are evaluated as a possible inhibitory factor in growth and recovery of the economy’s capital stock.
At the same time, new US duties are returning as a threat to both the EU and specifically for Greece. According to a study by the Commission (May 2025), imposing unilateral US duties can reduce EU GDP by 0.2% per year from 2025–2027, while in the event of symmetrical countermeasures, the impact will reach up to 0.4%. At the same time, the deterioration of commerce terms and reducing EU incomes are additional risks.
The Greek empirical analysis of the office for the period 2018 – 2021 shows that duties had a limited total impact on exports to the US, with a negative impact on sectors such as:
- Prepared vegetables and fruits (outside olives)
- Cement
- Fossil fuels
- Steel artifacts
On the contrary, positive impacts are recorded in sectors such as:
- Aluminum (+37%)
- Machinery
- Building materials
The report concludes with policy proposals to boost exports, such as liquidity support, tax incentives and more active intervention by Export Credit Greece.