The International Monetary Fund (IMF) recently concluded its 2025 Article IV consultation mission in Greece, highlighting a favorable near-term economic outlook with sustained real GDP growth. According to the IMF staff, "the public finances have further improved, with the public debt-to-GDP ratio on a firm downward trajectory." This progress is attributed to fiscal consolidation and efforts to reduce tax evasion.
Greece's economy showed robust growth in 2024, driven by strong domestic demand and investment projects funded by the Next Generation EU (NGEU). The unemployment rate fell to a historic low of 9.5 percent in the third quarter of 2024. However, challenges such as low labor force participation rates and persistent services inflation remain.
The banking sector has also shown resilience with improved asset quality and capital adequacy. The non-performing loan (NPL) ratio dropped to around 3 percent, facilitated by government-backed securitization frameworks. Despite these improvements, "there is room for a further strengthening of voluntary capital buffers."
Real GDP growth is projected at 2.1 percent for 2025 but is expected to moderate in the medium term due to demographic challenges and sluggish productivity growth. The IMF staff stressed that continued fiscal consolidation would bolster public debt sustainability while enhancing social spending efficiency.
Additionally, structural reforms aimed at addressing supply-side impediments are crucial for increasing productivity and achieving energy security. The report noted that "continued progress in green and digital transition will help achieve energy security and further boost productivity growth."
On financial system resilience, the IMF emphasized enhanced monitoring of credit risks by banks along with strengthening capital adequacy. They welcomed recent macroprudential measures such as borrower-based measures for mortgage loans.
In conclusion, the IMF mission expressed gratitude towards Greek authorities for their hospitality during discussions.