Capital Economics sees steadily rising and sustainable growth rates for the Greek economy through 2025, indicating that it will continue to outperform the Eurozone in the coming years. It is expected to close 2024 with growth of 2.3%, 2025 with 2%, and 2026 with 1.9%. At the same time, analysts expect debt to fall to 155% of GDP this year, 147% in 2025, and 141% in 2026. 

THE INVESTMENTS

Analysts emphasize that the third quarter saw a decline in investment, underscoring the importance of prioritizing the goal of closing the investment gap. However, the house stresses that the Recovery Fund will continue to contribute to investment growth in the coming years, and the use of the funds will create the right conditions to reduce the investment gap that separates us from the Eurozone average. 

INFLATION

As regards inflation, Capital Economics highlights that it fell but was higher than the Eurozone average. In particular, the structural index in November reached 4.5%, which analysts attribute to the price of electricity and the increase in prices in services. Indeed, they expect inflation to continue to plague the Greek economy in the new year. The house sees inflation at 3% this year, 2.8% in 2025, and 3% in 2026.

WEAK GROWTH IN EUROPE

At the same time, analysts see low growth in the euro zone, while the French and German crises are active. Indeed, the lack of competitiveness of European industry combined with higher interest rates (despite the reductions being made) are leading to anaemic growth. These, combined with possible tariffs by D. Trump on European products, may create conditions for a major contraction of the economy, analysts conclude.