The International Monetary Fund (IMF) on Tuesday lowered its forecast for Greece’s economic growth this year, from 2% to 1.8%, projecting a marginal downturn due to the conflict in Iran.

Greece’s short-term economic outlook remained favorable. However, a “prolonged conflict” in the Middle East could negatively affect domestic and external demand and weaken capital flows, the Fund stated.

Last October, the IMF had forecast that the Greek economy would grow by 2% in 2026.

The IMF report is another sign of the wider impact of the conflict in Iran and the broader Middle East, which has destabilized the global economy and led to a sharp reduction in oil flows, heightening fears of inflation.

Greece, which flirted with economic collapse the previous decade, emerged from a 2010–2018 debt and financial crisis, and the center-right government last year forecast economic growth of 2.4% for 2026—exceeding the eurozone average—based on expected strong domestic demand, tourism revenues and increased investment supported by EU funding.

Earlier this month, in an interview with Reuters, Greek Finance Minister Kyriakos Pierrakakis said that even in the worst-case scenario, the Greek economy would grow by about 2% this year.

On Monday, Prime Minister Kyriakos Mitsotakis announced subsidies for fuel and fertilizers, as well as discounts on ferry tickets, in order to protect consumers and farmers from rising energy prices.

The IMF also welcomed the steady downward trend in the public debt-to-GDP ratio and praised the ongoing progress in tackling tax evasion, as well as the stable quality of assets in the Greek banking system.

The entire statement is here:

Greece: Staff Concluding Statement of the 2026 Article IV Consultation Mission