The Greek economy is set to outperform the Eurozone average in 2026, 2027 and 2028, according to the Dutch-based multinational ING Group.
In detail, the multinational group project growth will hit 1.6% in Greece in 2026 and 2027, increasing to 1.7% in 2028, with the country’s GDP settling at 0.3% for 2026, while averaging 1.2% in 2027 and 2028.
ING estimates inflation to hover around 4.2% in 2026, recording a notable downtick to 2.9% in 2027, compared to the Eurozone average of 3.3% and 2.4%, respectively.
Regarding the Eurozone fiscal policy, the group estimates the upward cycle of interest rates will be limited, while markets believe 75 basis points will be the ceiling in the tightening fiscal cycle to ward off the effects of stagflation as a result of the war in the Middle East.
The Global Head of ING Macro, Carsten Brzeski, stressed that while the European Central Bank (ECB) was the first central bank to raise rates by 0.25% to guard against stagflationary pressures, it would likely adopt a second round of rate increases in July or September.
ING, however, warns that as long as the bond markets are effectively “replacing” the ECB’s mandate to implement strict fiscal policies, and given that governments are avoiding fueling an inflationary spiral through fiscal transfers, and weak macroeconomic condition, it is reasonable to assume that the ECB would genuinely want to combat an exogenous supply shock with aggressive interest rate hikes at the cost of a potential recession.
