Goldman Sachs sings the praises of the Greek economy continuing on a steady growth path, with most indicators steadily improving, resulting in continued high confidence by investors.

The U.S.-based bank, however, cautions that the Greek economy faces three challenges that could impede its progress. Regarding the construction sector, it recommends careful management to avoid “overheating” that could lead to an excessive rise in prices, similar to 2000.

On the employment front, it stressed that despite high employment rates, skilled labor remains underemployed, suggesting the country needs to employ reskilling and upskilling programs to fully leverage the workforce potential.

Finally, the bank points to the inefficient and lagging legal system, noting it often acts as a deterrent for business investments. The Disposition Time (DT) is among the highest in the Eurozone, it notes.

Since 2019, productivity in Greece has been rising steadily, while GDP per capita has posted the strongest increase in Southern Europe, surpassing even the eurozone average.

Goldman Sachs’ Current Activity Indicator suggests the Greek economy is maintaining resilience consistent with growth above 2%, with business confidence remaining solid—particularly in construction.

Investment spending excluding residential real estate has climbed back to 2009 levels, with all major categories of fixed investment strengthening since 2019. Outlays on intellectual property products and ICT equipment have recorded sharp gains, contributing to improved productivity.

Even so, real incomes remain roughly 10% below their 2007–08 levels, leaving room for further recovery, according to Goldman Sachs.

At the same time, the bank says Greece is pursuing an “extremely prudent” fiscal policy. The country’s primary surplus ranks among the highest for small EU member states and sits well above the eurozone average.

The invstement bank also notes that Greece is targeting a primary surplus of 3% of GDP in 2026—the highest in the eurozone. Around 70% of Greek public debt is held in long-term European support programs, helping keep effective borrowing costs among the lowest in the currency bloc.

Based on the bank’s dynamic model, the debt-to-GDP ratio is expected to keep falling with a very high degree of probability—even under a low-growth scenario—and is projected to drop below Italy’s by 2028.