"The economy will continue to grow" - Forecast/ The year ends with a rate of 3.9%, boosted by consumption and investments
The government's forecast for the continuation of 2025 is optimistic and the economy is expected to continue its positive growth rate at a rate of 3.9 percent. During the medium-term period 2026-2028, growth is forecast at an average of around 4.0 percent per year and is expected to be generated mainly by domestic demand, both consumption and investment, while net foreign demand (export-import) is expected to have a positive effect.
Referring to the mid-year report on the implementation of the state budget, it is stated that private consumption is expected to be the main driver of GDP growth again, stimulated mainly by the improvement in consumer confidence, as well as by the improvement in the labor market. The latter are expected to be transmitted to a gradual increase in wages which are further expected to stimulate the real disposable income of individuals, especially after the return to normal inflation levels during 2024.
In line with medium-term growth forecasts, employment is expected to grow by an average of about 0.1 percent per year during 2026-2028. The higher labor force participation rate will be the main generator of labor supply growth.
Meanwhile, the increase in labor demand is expected to reflect almost the same structure of the aggregate supply outlook for economic activity. Consequently, services are expected to contribute more to the increase in labor demand compared to other sectors of the economy. In addition to the expected expansion at moderate levels of employment in the medium term, overall labor productivity is also expected to continue a gradual improvement.
At the same time, fiscal policy for 2025 will target a public investment level of 6.2% of GDP and, subsequently, for the medium term, it will maintain a relatively high level of around 5.9% of GDP throughout 2026-2028.
The economy has had positive performance in recent years, experiencing progressive growth and 2024 closed with an annual growth rate of 4 percent per year.
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