Greece: Economic growth edges up in the fourth quarter of 2025
Greece ends 2025 on a high note: Greece’s GDP expanded 0.8% in seasonally and calendar-adjusted quarter-on-quarter terms in Q4, following a 0.7% expansion in the previous quarter. Q4’s reading was the strongest since Q2 2024. On a seasonally and calendar-adjusted year-on-year basis, the economy expanded 2.4% in Q4, following 2.1% growth in the prior quarter. Full-year growth in 2025 remained broadly stable for a third straight year.
Private spending and fixed investment spearhead GDP acceleration: Compared to the previous period’s data, readings in Q4 improved for private consumption (+0.8% in seasonally and calendar-adjusted quarter-on-quarter terms vs +0.4% in Q3), government consumption (-0.4% vs -0.8% in Q3), fixed investment (+4.3% vs +3.9% in Q3), exports of goods and services (+1.0% vs +0.4% in Q3) and imports of goods and services (+3.7% vs -1.5% in Q3). A lower unemployment rate than in Q3, sustained real wage increases and inflation falling to an over four-year low all contributed to the pickup in private spending. Meanwhile, fixed investment growth was driven by a surge in construction, which grew 51.7% quarter-on-quarter in Q4 after declining 2.4% in the prior quarter. On the flipside, rapidly expanding construction output was most likely the driver of a jump in imports. As a result, net trade remained negative despite exports clocking their fastest growth rate in over a year.
Comparing 2025 as a whole to the previous year, private spending lost steam, but public consumption rebounded, fixed investment growth more than doubled and the drag from the external sector softened on the back of accelerating exports and falling imports.
GDP growth to remain broadly stable this year: Moving to Q1 2026, sequential GDP growth should ease from the prior quarter and hold broadly steady through Q1 2027. On an annual basis, GDP growth is seen remaining largely stable for a fourth year running. Public and private consumption should gain pace, the latter aided by improving labor market conditions. Moreover, fixed investment should continue to grow vigorously, albeit at a slower pace, supported by EU Next Generation fund disbursements. The external sector, however, will remain a drag, as import growth is seen outpacing that of exports. A prolonged U.S.-Iran conflict diverting tourists elsewhere and persistently pushing up energy prices is a key downside risk; fossil fuels account for roughly 80% of Greece’s total energy supply.