Greece Private consumption

Economic growth decelerates in the first quarter of 2026

GDP growth slows to weakest pace since Q3 2023: Greece's GDP expanded 0.2% in seasonally adjusted quarter-on-quarter terms in the first quarter of 2026, following a 0.7% expansion in the previous quarter. Q1's reading was the weakest since Q3 2023. On a seasonally adjusted year-on-year basis, GDP grew 2.0% in Q1, following 2.3% growth in the prior quarter.

Private spending and investment weigh on momentum: Compared with the prior quarter's data, figures in Q1 softened for private consumption (0.0% in seasonally adjusted quarter-on-quarter terms vs +0.7% in Q4), fixed investment (-2.5% vs +3.3% in Q4), exports of goods and services (+0.3% vs +0.9% in Q4) and imports of goods and services (-0.6% vs +3.6% in Q4). In contrast, the reading for government consumption improved in Q1 (+2.4% vs -0.3% in Q4). Household consumption stagnated as consumer sentiment wilted due to higher inflation; price pressures have been stoked especially high by the Iran energy shock because of Greece’s heavy reliance on natural gas for power generation.

Iran energy shock clouds the outlook: Moving to Q2, sequential GDP growth is likely to hover close to Q1’s subdued pace before gaining momentum toward the end of the year. Still, annual GDP growth is expected to slow this year from 2025, as the Iran energy price shock pulls private consumption growth to a six-year low despite relief from tax cuts and energy support measures. Meanwhile, public consumption and fixed investment growth should remain robust, aided by EU funds. A resumption of the Iran war poses a downside risk given Greece’s dependence on imported natural gas and its geographical proximity to the conflict, which could hurt tourism activity—around 25% of GDP.

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