Core inflation in Greece is forecast to reach 2% by the end of 2025 as core inflation pressures ease only gradually despite continued normalization of energy and food prices, the International Monetary Fund report said.

He notes that Greece’s economic prospects have improved significantly. Following a strong post-pandemic recovery, economic activity remained robust, with real GDP forecast to grow 2.3% in 2023 and 2.1% in 2024.

Risks are more balanced on growth, but “slanted to the upside on inflation,” the Fund notes.

A possible escalation of Russia’s war in Ukraine and the conflict in Gaza and Israel could disrupt trade, put renewed pressure on energy and food prices and undermine confidence.

Conversely, the acceleration of ambitious structural reforms, combined with stronger-than-expected market reactions to the recent investment grade upgrade, could further improve growth prospects.

Inflation could remain high, for example, as a result of pressures from recent and expected wage and pension increases and shocks related to climate change.