IMF Lowers Greece's Economic Growth Forecast Amid Iran Conflict Impact

The International Monetary Fund (IMF) has adjusted Greece's economic growth forecast for the year, reducing it from 2% to 1.8%. This change is attributed to the ongoing conflict in Iran, which has slowed economic rebounds due to its impact on energy prices and external demand.

According to the IMF, the protracted conflict in the Middle East is likely to affect Greece's private consumption and crucial tourism sector. Previously, predictions for 2026 suggested a 2% growth, but the recent revision reflects broader global economic instability, emphasized by rising inflation concerns.

The Greek government had projected more robust growth, buoyed by strong domestic demand, tourism revenues, and EU-supported investments. In response to the economic challenges, Prime Minister Kyriakos Mitsotakis announced subsidies to protect consumers and farmers from escalating energy prices. The IMF advised that such supports should be temporary to maintain effective price signals.