IMF: forecasts 1.8% growth of the Greek economy, 3.5% inflation in 2026 and a significant reduction in unemployment

Greece’s economy is expected to grow at 1.8% in 2026 and 1.7% in 2027, up from 2.1% last year, the International Monetary Fund said in its report on the outlook for the global economy, which is being strongly affected by the war in the Middle East.

The IMF’s “benchmark forecast” is that, under the weight of the war, global GDP growth will slow this year to 3.1% from 3.4% last year, to recover marginally to 3.2% in 2027. For the eurozone, growth is forecast to slow to 1.1% this year from 1.4% last year and rise to 1.2% in 2027.

For inflation, the IMF forecasts that in Greece it will rise from 2.9% last year to 3.5% this year to fall to 2.7% in 2027. In the eurozone, inflation is expected to rise from 2.1% last year to 2.6% this year and fall to 2.2% in 2027, while for the global economy it is expected to rise to 4.4% this year from 4.1% in 2025.

The Fund forecasts a big drop in unemployment in Greece, from 8.9% in 2025 to 7.4% this year and 7.1% in 2027. For the eurozone, unemployment is expected to fall from 6.3% last year to 6.2% this year and 6.1% in 2027.

Greece’s current account deficit is expected to rise from 5.7% of GDP in 2025 to 6.4% in 2026 to fall back to 5.7% in 2027.

Greece’s current account deficit is expected to rise from 5.7% of GDP in 2025 to 6.4% in 2026 to fall back to 5.7% in 2027.

The IMF uses the term “benchmark forecast” for the global economy instead of the baseline scenario used in previous reports, and has also developed an adverse and an extreme scenario.

The benchmark forecast is based on the assumption that the war will not last more than a few more weeks, so that the disruption to the global economy will de-escalate and production and exports from the Middle East region will normalise by mid-2026, with a 19% increase in energy prices in 2026 and a 21.4% increase in oil prices.

The IMF’s benchmark forecast includes a 50 basis point (half a percentage point) increase in the European Central Bank’s key interest rate in 2026.

The IMF’s benchmark forecast includes a 50 basis point (half a percentage point) increase in the European Central Bank’s key interest rate in 2026.

Under the adverse scenario, which assumes larger and more persistent increases in energy prices, global growth would fall to 2.5% in 2026 and global inflation would rise to 5.4%.

In the extreme scenario, which projects further damage to energy infrastructure in the Middle East region, global growth would fall further to 2% and global inflation would exceed 6% in 2027. “The likelihood of these scenarios materialising increases progressively as hostilities and related disruptions continue,” the Fund warns.

The IMF stresses that fiscal support measures decided by countries should be targeted and temporary. “Where fiscal support is deemed necessary to protect the most vulnerable against extreme external shocks, it should be targeted, timely, temporary, and financed within budget constraints, with reprioritization, and if this is not possible, with a clear indication of the path to restoring fiscal balance,” the Fund notes.