The International Monetary Fund (IMF) forecasts a sharp decline in Greece’s public debt by 16.5 percentage points over the next five years — even if primary budget surpluses are smaller than those targeted by the government — according to its latest Fiscal Monitor report.

The IMF projects that Greece’s debt-to-GDP ratio will fall from 146.7% in 2025 to 130.2% in 2030, as the country maintains a steady fiscal path with consistent annual primary surpluses.

However, the Fund expects lower primary surpluses than the official government estimates — despite the fact that, over the past three years, Greece has regularly outperformed its fiscal targets.

Specifically, for 2025 the IMF projects a primary surplus of 3.2% of GDP (vs. 3.6% estimated by Athens), and for 2026, 2.3% (vs. 2.8% in the new state budget). Thereafter, surpluses are expected to be 1.8% for 2027–2028, 1.9% in 2029, and 2.0% in 2030.

Despite these smaller surpluses, the IMF considers them sufficient to ensure continued debt reduction and manageable financing needs for the Greek government.

No Concern Over “Small” Deficits and Extra Spending

While primary balances remain positive, the overall fiscal balance (including interest payments) is expected to show small deficits. The IMF projects a zero balance in 2025, followed by deficits of –0.8% of GDP in 2026 (compared to Athens’ forecast of –0.1%) and –1.4% from 2027 onward.
The Fund stresses that these modest deficits do not threaten fiscal stability and are linked mainly to higher spending on growth initiatives and social support.

Revenues: Resilient Despite Tax Cuts

Interestingly, the IMF foresees public revenues rising to 50% of GDP in 2026, even after new tax relief measures worth €1.76 billion aimed at supporting the middle class. This implies that economic activity and the tax base will continue to expand, offsetting losses from lower taxes. Revenues are then expected to gradually fall to 46.8% of GDP by 2030, likely reflecting further tax reductions.

Public expenditures are projected to follow a similar path — increasing to 50.8% of GDP in 2026, before declining to 48.2% in 2030.

IMF’s Overall Assessment

The IMF acknowledges Greece’s significant progress in debt reduction and fiscal discipline, while warning that challenges remain. Sustaining fiscal stability and boosting growth and productivity are seen as key conditions for durable improvements in living standards.

It is also noted that the IMF calculates debt differently from the European Commission, which explains the variation between their estimates.