Economic activity continued to expand in the first quarter of 2026 (2.0% year-on-year; 0.2% quarter-on-quarter), outperforming the euro area (0.5% year-on-year; 0.0% quarter-on-quarter), despite elevated uncertainty in the international economic environment, according to the Bank of Greece's "Note on the Greek Economy". Growth in the first quarter of 2026, compared with the same period of the previous year, was mainly driven by the positive contribution of investments (2.0 percentage points), net exports (0.6 pp) and private consumption (0.5 pp), while inventories made a negative contribution. HICP inflation remained at 2.9% in 2025. During the first six months of 2026, headline inflation reversed its previous trend, increasing to an average of 3.8%, primarily due to significant increases in energy prices. In June 2026, headline inflation declined to 3.9% from 4.9% in May, reflecting lower inflation in services, energy and unprocessed food. In the housing market, apartment prices continued rising, albeit at a decelerating pace, throughout 2025 and in the first quarter of 2026. Labour market developments remained positive in the second quarter of 2026, with employment continuing to rise. Looking ahead, according to the latest Bank of Greece baseline projections, Greek economic growth is expected to moderate to 1.9% in 2026, reflecting heightened uncertainty in the global economy, remain at 1.9% in 2027 and reach 2.0% in 2028, continuing to outperform euro area growth. Growth will be mainly driven by private consumption and investment, while the contribution of net exports is expected to remain negative. Inflation is projected to reach 3.8% in 2026 and gradually moderate thereafter, assuming that the war in the Middle East comes to an end and energy and food prices decline. (ICE ATENE)

Fonte notizia: Bank of Greece