A new analysis by JPMorgan addresses the question of “how real and how resilient the Greek macroeconomic scenario is,” noting that many steps have been taken on the fiscal front and in investments, while political stability has strengthened confidence.
However, although Greece’s recovery story is maturing and the transition to a productivity-based growth model is possible, it is not guaranteed.
As JPMorgan notes, Greece’s macroeconomic environment has improved significantly. GDP has been growing faster than the eurozone for several years, unemployment has fallen to precrisis levels (from 28% to 8%), the fiscal position is strong, the debt ratio is on a sharp decline and the Greek state is rated within investment grade, with the government now aiming for an A rating by 2030.
This momentum is reinforced by improvements in institutions, employment, investment and fiscal management, although its duration will increasingly depend on productivity and private investment, in contrast to the post-crisis recovery process and EU financing.
Fiscal credibility is now a structural pillar of Greece, JPMorgan emphasizes, as the country is among the few European countries that have a fiscal surplus, without resorting to extensive increased tax cuts and spending cuts that characterized the adjustment years.
This improvement was supported by spending control, employment support, digitalization of tax administration and improved tax compliance – including additional revenues from anti-tax evasion measures – allowing for selective tax cuts while keeping debt on a declining path.
Gross debt remains high, at 146% of GDP, but the long average maturity, the structure largely based on fixed interest rates and continued early repayments limit the vulnerability to refinancing, with the debt ratio expected to decline toward 134% by 2027.
At the same time, it adds, investment is broadening the growth mix, but convergence is not yet complete.
The recovery in investment is the second pillar of support, with the investment-to-GDP ratio increasing to 16.9% in 2025 from 11.3% in 2018 and the gap with the EU average narrowing by about half. In addition, policy continuity has reduced Greece’s macroeconomic risk premium, as it underlines. The policy model has become more predictable, with macroeconomic governance, pro-investment reforms and EU commitments providing a clearer operating framework for businesses and banks than in the previous cycle, the US bank stresses.
However, as JPMorgan notes, Greece’s growth is expected to moderate in the medium term, as the momentum for catching up weakens. It is projected to slow GDP growth to 1.4% as the implementation of the Recovery and Resilience Facility is completed, the recovery story matures and demographic constraints become more visible.
The government’s aim is to shift from subsidy-led growth to productivity-led growth through reforms, higher private investment and a broader tradable goods sector.