GDP growth accelerates in Q2

Momentum strengthens: GDP growth gained traction to 0.6% on a seasonally adjusted quarter-on-quarter basis in the second quarter, up from 0.1% in the first quarter. On an annual basis, economic growth waned to 1.7% in Q2 from the previous period's 2.2% expansion, marking the softest growth since Q1 2021.

Improvement in external sector supports GDP growth: The acceleration was driven by rebounds in public spending, fixed investment and exports of goods and services. Government consumption returned to growth, expanding 2.4% in Q2 (Q1: -1.8% s.a. qoq). Fixed investment also bounced back, growing 7.4% in Q2, supported by recent interest rate cuts and contrasting with the 5.0% contraction logged in the previous quarter. Less positively, household spending shrank 0.2% in Q2, marking the worst result since Q3 2023 (Q1: +1.2% s.a. qoq). This downturn came despite the unemployment rate declining to levels unseen since the 2008 financial crisis, which suggests Greek households may have recently increased their precautionary savings amid sustained trade turmoil. On the external front, exports of goods and services rose 1.3% on a seasonally adjusted quarterly basis in the second quarter, contrasting the first quarter's 0.6% slowdown. Conversely, imports of goods and services deteriorated, contracting 0.9% in Q2 (Q1: +0.4% s.a. qoq).

GDP growth to cool this year: In 2025, the economy is expected to post its weakest expansion since the pandemic due to a slowdown in fixed investment. However, a rebound in public spending and robust tourism activity will underpin momentum.

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