Greece’s economy is expected to continue growing into 2026 while Greeks will see an increase in their incomes, according to a report released by the OECD on Wednesday, November 4.
The Organization for Economic Cooperation and Development in its biannual Economic Outlook report on the economic prospects of OECD members says the Greek economy is strong. It predicts it will grow at a rate of 2.3 percent in 2024, 2.2 percent in 2025, and 2.5 percent in 2026.
The report further predicts that as real household income per person is rising and is higher at present than prior to the pandemic, “rising disposable income will strengthen consumption, as a tight labor market and minimum wage increases support wages.”
According to the OECD, Greece is one of few EU member states for which the potential per capita growth has been revised upwards. Others doing well include Portugal and Spain. This, the report notes, “indicates that structural reforms are yielding benefits over the course of time as these countries are among those that carried out the most reforms in the two previous decades.”
The report also predicts that unemployment will ease progressively amid rising labor costs while inflation is expected to reach 2 percent in late 2026 amid persistently high service costs and core inflation.
Despite the expected growth, challenges for Greece’s economy remain
Despite the expected growth, Greece’s economic future is not without its challenges. According to the report, any delays in the absorption of European funds, excessive wage increases or possible new extreme weather events could hamper prospects for the Greek economy.
Furthermore, the report says that reduction of public debt (currently at over $395 billion) should be a firm priority for the Greek government, as the increased costs of an aging population and the need to support investment will put pressure on expenditures.
The OECD adds that Greece needs to further improve its public spending, especially in areas such as education, health, and investment, which, in turn, will increase growth and primary surpluses. In addition, Greece needs to continue its efforts to fight tax evasion.
Higher incomes important for Greeks’ livelihoods
In November, the OECD’s global report on quality of life placed Greece in the third lowest place among the 35 OECD member states in terms of wage levels, trailing Mexico and Colombia and closely followed by Slovakia and Hungary.
The November report notes that Greece has the highest proportion of citizens struggling to make ends meet after Mexico, Slovakia, and Turkey, with over 65 percent of Greeks facing financial hardships.
The average monthly wage in Greece stands at around 1,200 euros ($1,265) while minimum wage is at 830 euros ($875) in a country where home prices are skyrocketing along with the price of food. The Greek government envisages bringing the average monthly salary to 1,500 euros ($1,581) by 2027, where it stood prior to the country’s financial crisis that broke out in 2010. However, analysts say it is unlikely the government will be able to achieve this goal.
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