The evolving situation in the Middle East is forcing a revision of economic forecasts, with direct implications for the budget. The Finance Ministry is working on two scenarios for the impact of the conflict, projecting growth between 1.5% and 1.9% this yearThe evolving situation in the Middle East is forcing a revision of economic forecasts, with direct implications for the budget. The Finance Ministry is working on two scenarios for the impact of the conflict, projecting growth between 1.5% and 1.9% this year, Kathimerini has learned. The data so far show the extreme scenario of the budget is now becoming the new baseline scenario of the ministry. So Greece’s growth rate in 2026 is expected to be 1.9% compared to a forecast of 2.4% growth that had been set in the budget, and after 2.2% growth in 2025. The revision of inflation forecasts place it at around 3.5% this year, compared to a decrease to 2.2% that had been forecast (and from 2.6% in 2025). Last October’s budget considered an extreme scenario (based on the Oxford Economic Model) that predicted a 0.5 percentage point drop in growth if oil prices remained at $100 throughout 2026. The new macroeconomic forecasts of the ministry will be announced at the end of the month with the annual progress report on the objectives of the Medium-Term Fiscal – Structural Plan 2026-2029, to the European Commission. In addition to the new forecasts, the report will also incorporate the effects of the package of the government’s extraordinary support measures. A week earlier, Eurostat is expected to announce the final fiscal data for 2025. Greece follows a multitude of other countries that are forced to revise their economic forecasts due to the conflict. Meanwhile, the International Monetary Fund downgraded on Tuesday its estimates for international growth, and upgraded those for inflation, with the commission expected to make similar moves next month during its Spring Forecasts for Europe. The IMF now sees Greece’s growth at 1.8% (down from 2% in October 2025), while the Bank of Greece has already revised down this year’s growth since March, to 1.9% from 2.1% previously.
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