IMF cuts Greek growth outlook and sees inflation rising to 4.2% in 2026

IMF growth outlook

The International Monetary Fund's World Economic Outlook, published on 13 October 2026, projects Greek GDP growth of 1.8% in 2026 and 1.8% in 2027. The 2027 forecast is slightly up from 1.7% in the previous estimate, while the 2026 figure is unchanged from the IMF's April report. The fund puts euro area growth at 1.1% in 2026 and 1.2% in 2027, so Greece is expected to grow well above the bloc average. The government's draft budget projects 2% growth for 2026 and 2.3% for 2027. The gap is within statistical error this year and about half a point in 2027, and the finance ministry's figures still rely on European Commission projections that have not yet been updated.

Inflation and the energy shock

The IMF expects consumer price inflation to rise to 4.2% in 2026 from 2.9% in 2025, before easing to 3.6% in 2027. The fund links the increase to a larger-than-expected impact of the war in the Middle East on energy prices, which is passing gradually into goods and services. The government's draft budget puts inflation at 3.8% for 2026 and 2.6% for 2027, and at 3.6% and 2.4% on the harmonised index used for comparisons between EU member states. Greek inflation is projected to stay above the euro area's 3.1% in 2026 and 2.8% in 2027. The draft budget was drafted before Eurostat published its September inflation figure of 5.1% and ELSTAT published 5%, so the government's inflation estimates could be revised.

Unemployment and the current account

The IMF sees unemployment falling from 8.9% in 2025 to 8% in 2026 and 7.6% in 2027, compared with government estimates of 8.4% and 7.9%. The fund expects euro area unemployment to hold at 6.3% in 2027. The current account deficit is projected to widen from 5.7% of GDP in 2025 to 6.5% in 2026, before narrowing to 5.9% in 2027. The higher deficit reflects dearer energy imports, since Greece still relies heavily on fossil fuels despite progress in renewable energy. Brent crude traded above $106 a barrel, raising concerns about further increases in fuel, transport and product prices.

Global context and debt warning

The IMF says the global economy has absorbed seven years of shocks, from the coronavirus pandemic to the wars in Ukraine and the Middle East, but that its resilience has reached its limits. Repeated crises have used up fiscal room and pushed public debt to unsustainable levels in many countries, including large advanced economies, while borrowing costs have risen significantly. The fund says restoring fiscal space in those countries is necessary. So far the global economy has held up thanks to measures taken for the energy crisis and an investment boom in artificial intelligence.

Government response and next steps

The IMF outlook comes as the IMF and World Bank hold their annual meetings in Bangkok, Thailand, from 12 to 18 October. The government is expected to announce its first package of measures on Wednesday, 14 October, including subsidies for heating oil and diesel to limit part of the fuel price increase. The draft budget is due to be submitted to Brussels within the week. The final draft budget goes to parliament in late November, and that is the point at which the government's forecasts can be revised if the outlook keeps worsening.