Greece’s GDP growth is expected to reach 2.3% in 2024, accelerate to 2.5% in 2025 and decline slightly to 2.3% in 2026 and 2.0% in 2027, the Bank of Greece (BoG) said on Friday.

The main component of economic growth is estimated to be consumption, while investment and exports will continue to contribute positively. Overall, the net contribution of the external sector to GDP will be slightly negative in the coming years, as strong investment activity and stronger consumption are expected to cause imports to increase at a rate comparable to that of exports.

Inflation is expected to reach 3.0% in 2024, down from 4.2% in 2023, reflecting a significant slowdown in food inflation. By 2026, inflation will converge towards the ECB’s target of 2%, but will remain slightly above it. Services inflation is expected to be more persistent than inflation in other HICP components, mainly reflecting expected increases in labour costs. Finally, core inflation is expected to decline significantly to 3.5% in 2024 and 3.1% in 2025, reflecting a decline in mainly non-energy industrial goods inflation.