Once in crisis, Greece has returned to solid economic growth with rising credit ratings, declining debt, and new fiscal surpluses, positioning the country for sustained investment and reform gains.
At a Glance
- Greece posted a 1.3% budget surplus in 2024, among the highest in the EU
- Credit rating upgraded to BBB as debt-to-GDP fell from over 200% to 154% since 2020
- Growth forecast between 2.0% and 2.3% for 2025 by multiple institutions
- €1 billion in financial benefits announced for citizens and public investment
- EU Recovery Fund projects, banking reforms, and digitalization driving momentum
Fiscal Strength Returns
After more than a decade of austerity and crisis, Greece ended 2024 with a general government budget surplus of 1.3% of GDP, placing it among just six European Union members to achieve a surplus. The government responded with a €1 billion package of financial benefits, including a one-month rent refund for renters in November, a €250 annual payment to elderly, disabled, and uninsured citizens, and an increase of €500 million per year to the Public Investment Program to expand infrastructure and job creation.
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This fiscal strength is underpinned by improved revenue collection, tighter expenditure control, and ongoing economic expansion. The European Commission projects primary budget surpluses of over 2% of GDP through 2026, keeping Greece within the EU’s fiscal targets.
Credit and Debt Outlook Improves
In March 2025, DBRS Morningstar upgraded Greece’s sovereign rating to BBB from BBB low, noting significant progress in reducing debt and strengthening the banking sector. Public debt, which exceeded 200% of GDP in 2020, fell to 154% by the end of 2024 and is expected to drop below 140% by 2027.
The upgrade reflects improved investor confidence, supported by steady GDP growth, low borrowing costs, and reforms that have stabilized financial institutions. Stronger balance sheets in the banking sector have unlocked more lending capacity for businesses and households, further fueling economic activity.
Structural Recovery Underway
A broader structural recovery is taking shape. Since the 2009 debt crisis, Greece has implemented far-reaching reforms, including modernizing tax administration, promoting digital services, and easing business regulations. These measures have helped attract foreign direct investment and improve productivity in key sectors.
The European Union’s Recovery and Resilience Facility is a major driver of current momentum, financing renewable energy projects, transport upgrades, and digital infrastructure. Combined with rising wages and steady tourism receipts, these investments are expected to maintain annual GDP growth near 2% through at least 2026, according to the IMF, OECD, and European Commission.
Challenges and Sustainability
While growth is robust, challenges remain in productivity, labor force participation, and social inequality. Economic forecasts assume continued political stability and adherence to fiscal discipline, as well as effective use of EU funds. Inflation, which is projected to ease to about 2.3% in 2025, will also influence real wage gains and consumption patterns.
If current trends hold, Greece’s economic resurgence may mark a long-term turning point from the years of recession and bailout dependency to a period of sustained, investment-driven growth.
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