Citi forecasts resilient growth, strong investment activity and a continued decline in public debt for the Greek economy. It nevertheless warns that high inflation, the large current account deficit and political uncertainty ahead of the 2027 elections represent significant challenges.

In its report on the global economic outlook, the US financial institution estimates that Greece’s GDP will grow by 1.8% in both 2026 and 2027, before the growth rate slows to 1.5% in 2028.

The institution believes that the Greek economy is maintaining positive momentum, primarily thanks to investment, while the favourable structure of public debt provides significant protection against turbulence in international markets.

At the same time, Citi considers that, despite the possible re-emergence of political risk during the election year, economic policy is expected to maintain continuity and its existing direction after the elections.

Investment drives growth

Investment activity is the strongest driving force behind the Greek economy, according to Citi’s forecasts.

Fixed capital investment is expected to increase by 8.3% in 2026, significantly outpacing the growth rates of private consumption and overall GDP.

An increase of 6.5% is forecast for 2027, while the rate is expected to fall to 2.1% in 2028.

Private consumption is estimated to grow by 1.3% this year and by 1.5% in both 2027 and 2028, suggesting that economic growth is being driven more by investment than by the momentum of consumer spending.

Similarly, exports are forecast to increase by 2.5% in 2026, 2.2% in 2027 and 2% in 2028, while imports are expected to rise by 3.7%, 2.5% and 2.4%, respectively.

Inflation at 4.1% and pressure from energy prices

The resurgence of inflationary pressures represents a significant challenge for the Greek economy. Citi forecasts that harmonised inflation will reach 4.1% in 2026, before easing to 3.5% in 2027 and 2.2% in 2028.

This development is linked to the more adverse international energy environment, as the conflict between the United States and Iran has led to a significant increase in oil prices.

In its global analysis, Citi puts the price of Brent crude at close to $115 per barrel, noting that energy costs are creating fresh pressure on businesses and households.

For the Eurozone, the institution expects inflation of 3.1% in 2026 and 3.4% in 2027, forecasting a further tightening of monetary policy by the European Central Bank.

Public debt on a downward trajectory

Although Greece’s public debt remains high, Citi acknowledges the continued improvement in the debt-to-GDP ratio.

According to its estimates, this ratio will fall from 138% in 2026 to 135.8% in 2027 and 133.9% in 2028.

The analyst emphasises that the favourable structure of Greek debt limits the country’s exposure to market fluctuations, putting it in a better position than other European economies.

At the same time, Citi forecasts a primary surplus of 3.8% of GDP in 2026, 3.1% in 2027 and 3% in 2028.

In terms of the overall fiscal balance, it estimates a surplus of 0.8% of GDP this year, followed by modest deficits of 0.1% and 0.4% over the next two years.

The major stumbling block: the external balance

According to Citi, the most significant structural weakness of the Greek economy remains its large current account deficit.

The institution forecasts that the deficit will widen to 6.9% of GDP in 2026, primarily as a result of rising energy prices.

For 2027, it estimates that the deficit will narrow to 6.2%, and for 2028 to 5.6% – levels that nevertheless continue to point to substantial external financing needs.

In absolute terms, the deficit is expected to reach €17.7 billion in 2026, €16.9 billion in 2027 and €15.8 billion in 2028.

Elections and the outlook for 2027

Citi points out that the 2027 election contest could bring political risk back into focus.

However, its baseline scenario envisages continuity in economic policy after the elections, limiting the risk of a significant change in direction.

On the employment front, it forecasts a further decline in unemployment, from 8.6% in 2026 to 8% in 2027 and 7.5% in 2028.

Overall, Citi’s assessment highlights a Greek economy that is maintaining positive growth rates and improving its fiscal position, but continues to face significant challenges from its external balance, inflation and international geopolitical developments.