Greece is on track to deliver two more years of robust economic growth, according to Morgan Stanley. The bank’s newly published “2026 European Economics Outlook” projects the country will continue to outpace the euro area in both 2026 and 2027. The bank notes that fiscal consolidation is progressing, albeit at a slower pace, and highlights that general elections must be held by June 2027.

Private consumption and investment remain at the core of Greece’s expansion. Morgan Stanley forecasts GDP growth of 2 percent annually in 2025, 2026, and 2027. It underscores that private consumption posted strong gains early in the year, rising 1.1 percent in the first half of 2025. This momentum is attributed to sizable increases in the minimum wage—up more than 6 percent this year—and a rise in compensation per employee, which exceeded 5 percent in early 2025.

Investment growth is tracking private consumption. The Recovery and Resilience Facility has played a significant role in strengthening the Greek economy, amounting to roughly 16 percent of GDP. To date, Greece has received funding equal to about 10 percent of GDP, or €21 billion, split between €11 billion in loans and €10 billion in grants. Although the exact amount disbursed so far is not fully clear, Morgan Stanley assumes that the 22 percent rise in private investment from early 2022 to the second quarter of 2025 is partly linked to the RRF.

Meanwhile, on Tuesday, the European Commission’s Autumn 2025 economic forecast estimates that the Greek economy is expected to expand at a strong rate of 2.1% in 2025 and 2.2% in 2026.

Strong consumer spending and investments, supported by EU funds, are driving the GDP growth, the forecast underlines.