IMF sees Greek public debt falling to 136% of GDP in 2026 and 128.7% in 2027

Greek debt on a downward path

The IMF's World Economic Outlook Database, published during the Bangkok annual meetings with the World Bank, projects Greek public debt at 136% of GDP in 2026, down from 146.6% in 2025. The fund expects 128.7% in 2027, followed by 124.1% in 2028, 119.9% in 2029, 115.4% in 2030 and 111.1% in 2031. The 2026 and 2027 figures are a mild improvement on the fund's April forecasts of 136.9% and 130.3%. The fund also expects Greece's debt this year to sit below Italy's 137.9%, which would end a 20-year stretch in which Greece ranked second among the most indebted eurozone countries.

Pierrakakis at the IMF panel

Kyriakos Pierrakakis, Greece's minister of national economy and finance and president of the Eurogroup, spoke on the central panel of the IMF annual meeting in Bangkok alongside IMF managing director Kristalina Georgieva. Georgieva praised Greece for repaying its IMF loans ahead of schedule and for funding technical assistance to other countries. Pierrakakis argued that the euro area has absorbed successive shocks and is now willing to push through reforms.

Europe is resilient to geopolitical developments and successive shocks.

He listed fragmentation of the internal market, high energy prices, large investment needs and public finances as remaining problems, while stressing that European banks are better capitalised than before. He pointed to the recent Eurogroup agreement on single supervision of European capital markets and said progress over the past 10 months exceeded that of the previous 10 years. Asked about the wider economy, he added the following.

We are monitoring developments, but we are not on alarm.

Productivity gap and EU deficits

Pierrakakis named Europe's productivity gap with the United States as the bloc's biggest problem. Over the last 30 years, US productivity grew at an average annual rate of 1.8%, against 1.1% in Europe, leaving European productivity at 75% of the US level, down from 90% in 2000. He called for European champions in every sector to close that gap. He also said the average EU deficit is now 3.5% of GDP, compared with 1.7% ten years ago.

France's deficit and bond markets

France is under the EU's excessive deficit procedure, with the Union advising Paris to bring its deficit closer to 3% of GDP from 5.1% last year. Emmanuel Moulan, governor of the Bank of France, said in an interview with CNBC at the Bangkok meetings that the rise in French borrowing costs does not reflect a change in fiscal conditions. He said the real issue is political uncertainty and whether a budget with the government's 5% deficit target will be approved. Moulan said returning to a 3% deficit by 2029 is feasible, though it would add about 10 billion euros a year in costs, and he rejected describing that effort as austerity. The IMF expects French debt to rise gradually to 122.6% of GDP.

Middle East war as the main risk

Jihad Azour, the IMF's head for the Middle East and Central Asia, told reporters that a prolonged war in the region and new disruptions to energy output, shipping or critical infrastructure are the biggest risks. The energy shock followed US and Israeli-led attacks on Iran and Tehran's decision to close the Strait of Hormuz. The fund projects the economies of the Middle East, North Africa and Pakistan to contract 1.3% in 2026 after 3.3% growth in 2025, with a stronger but uneven recovery expected in 2027. Azour said the forecasts assume trade and shipping return to normal in the first quarter of 2027. The IMF will publish its fuller regional outlook on 22 October.