2026 Budget: Greece Aims for 2.4% Growth, 2.2% Inflation

Greece formally submitted its 2026 state budget to Parliament on Thursday, launching the country’s annual budget process with a package the government describes as “realistic, social, implementable and growth-oriented.” Debate in the full chamber will begin December 13, with a vote expected on December 17, following committee discussions starting November 27.

The handover followed the traditional ceremony in which Finance Minister Kyriakos Pierrakakis, along with Deputy Minister Thanos Petralias, presented the budget to Speaker of Parliament Nikitas Kaklamanis, this year accompanied not only by the customary USB drive but also by a new fully digital version featuring a QR code stored in the cloud. As Pierrakakis noted, 2025 marks the final year the budget will be physically submitted via USB.

Pierrakakis and Petralias highlighted that, despite global uncertainty, the Greek economy is projected to outpace the eurozone for a sixth consecutive year. Growth is forecast at 2.2% in 2025 and 2.4% in 2026, compared with the eurozone’s 1.3% and 1.2% respectively. Nominal GDP is expected to rise from €248.7 billion in 2025 to €260 billion in 2026, while inflation is projected to ease from 2.6% to 2.2%. The draft includes lower income-tax rates, revised criteria for assessing living costs, reduced taxation on rental income, and measures tied to Greece’s demographic and housing challenges, such as easing property taxes in small villages and lowering VAT rates on select remote islands.

Pierrakakis framed the reform package as both social and forward-looking. He emphasized that Greece is “on the brink of the largest investment wave of the past decade,” supported by the country’s regained investment-grade status and expanding public investment. The 2026 budget, he said, is among the most socially oriented in recent years and delivers “the largest tax cuts of the post-1974 era.”

He acknowledged that many households continue to face high living costs and that younger Greeks remain worried about the future. The minister pledged that the government will “support society not with words but with actions,” stressing that the goal is to avoid “passing the bill to future generations.” Greece, he said, “has entered a path that must not be lost.”

A Budget Built on Tax Reform and Social Support

The draft budget places significant emphasis on a broad tax reform package designed to strengthen household incomes and stimulate growth. The restructuring focuses on younger taxpayers, families with children, and the middle class, while reducing rates across the board. According to the government, the changes will benefit wage earners, pensioners, farmers, and the self-employed as their incomes rise in future years.

Additional demographic and housing-related measures include:

• phased elimination of the annual property tax (ENFIA) for small villages with up to 1,500 residents
• reduced VAT rates for remote islands with populations under 20,000
• lower taxation on rental income combined with the return of one month’s rent annually
• reduced living-cost criteria for tax purposes, with dependent children exempted from minimum living-expense thresholds

Pensioners are set to receive further income support through the continued phase-out of the “personal difference” adjustment, allowing pension increases to fully reflect GDP and inflation trends.

Low-income retirees, uninsured elderly people, and citizens with disabilities will continue to receive an annual November supplement.

Pierrakakis described the draft as one of the most socially oriented budgets in recent years and noted that it contains “the largest tax cuts of the post-1974 era.” He emphasized that Greece is “on the brink of the largest investment wave of the past decade” and underscored the need to ensure “the bill is not passed to future generations.”

Strong Investment Momentum

Investment activity is expected to accelerate sharply over the next two years. The rate of investment growth is projected to rise from 4.5% in 2024 to 5.7% in 2025 and to 10.2% in 2026. This surge combines robust private-sector momentum with an expanded public investment program totaling €16.7 billion for 2026, compared with €14.6 billion in 2025.

This performance far exceeds eurozone investment projections of 2.2% in 2025 and 2.5% in 2026. As a result, Greece’s investment-to-GDP ratio is expected to climb from 16.4% to 17.7%.

Labor Market and Fiscal Path

Unemployment, which drops to single digits in 2025, is forecast to fall further to 8.6% in 2026—the lowest level since 2008.

The primary budget surplus is expected to reach 3.7% of GDP in 2025 and 2.8% in 2026. The overall general government balance is forecast at 0.6% in 2025 and –0.2% in 2026.

Greece’s debt-to-GDP ratio is projected to decline for the sixth consecutive year, reaching an estimated 138.2% in 2026—its lowest level since 2010 and the steepest multi-year drop currently recorded in the European Union.

The Parliamentary Road Ahead

Speaker Kaklamanis announced that the budget will be examined in four consecutive committee sessions on Nov. 27–28, 2025, with the full-chamber debate and final vote to follow in mid-December. As in previous years, the five-day plenary debate will conclude with speeches by all party leaders and the prime minister before the roll-call vote.

Parliament also received the required fiscal reports, audit documents, and the state’s 2025 financial accounts and balance sheet alongside the main budget bill.