In recent days, we’ve been seeing so much positive news about the Greek economy that it’s hard to remember the last time we had this many at once.
After the upgrade by MSCI, came another upgrade from STOXX. At the same time, S&P slightly lowered its growth forecast for Greece, but still sees strong resilience.
And as if that weren’t enough, Greece has achieved the largest and fastest reduction in debt-to-GDP ever recorded among Eurozone countries.
SECOND UPGRADE
Remember what we said about the MSCI upgrade? Well, just a few days later, STOXX announced the same. Greece is being upgraded from an emerging market to a developed market, effective September 21, 2026.
And here’s something very important. It’s not just STOXX. FTSE Russell has already confirmed it will do the same on the exact same date, September 21, 2026. MSCI will follow later, in May 2027, after a public consultation that showed strong support from the investment community.
So what does this actually mean?
It means capital inflows. Not just once, but gradually, as different portfolios track different indices. According to JPMorgan, passive inflows from STOXX index inclusion alone are expected to reach around $962.7 million. That’s capital entering mechanically, regardless of whether analysts think it’s a good idea or not.
And who benefits the most? The banking sector. Investors in developed markets allocate capital mainly through sector indices, and Greek banks will now be included in indices like the STOXX Banks Index. That means greater visibility in global portfolios.
There is, however, a catch. Greece’s weighting in developed market indices is expected to remain relatively low, around 0.05% to 0.08%. So the inflows are real, but not massive. The real value lies elsewhere. It’s about recognition. As Giannos Kontopoulos, CEO of Euronext Athens, said, this development reflects years of reforms and has both symbolic and practical importance.
LOWER GROWTH, BUT RESILIENCE
Let’s move to the second part. S&P lowered its growth forecast for Greece in 2026 from 2.3% to 1.7%. At first glance, that might sound like bad news. But if you read the report carefully, the picture is quite different.
Why? Because of geopolitical tensions in the Middle East, higher energy costs, and a slowdown in the global environment. In other words, factors beyond Greece’s control. The country is affected through three channels: tourism, energy, and consumption.
But here’s where it gets interesting. S&P acknowledges that the Greek economy now has “defenses” that didn’t exist in past crises. First line of defense is tourism, which remains strong despite geopolitical tensions. Second is investment, driven by the Recovery Fund and private projects. Third is the improved fiscal position, which allows for support if needed.
And one more thing. That 1.7% growth is still above the expected Eurozone average. So the narrative of relative outperformance remains intact.
GROWTH AND INFLATION
Now let’s look at what the Greek government says in its Medium-Term Fiscal Plan submitted to the European Commission. Growth for 2026 is projected at 2%, down from 2.4% previously. Inflation is expected at 3.2%.
What does this mean? Both S&P and the government are seeing the same picture. More moderate growth, but still ongoing. At the same time, there is a significant increase in support measures. Total fiscal interventions amount to €2.96 billion in 2025 and an additional €3.7 billion in 2026.
What do these measures include? For example, a €150 one-off payment per child, fuel subsidies for April and May, diesel subsidies, a permanent increase in pension support to €300 net with 420,000 additional beneficiaries, and rent reimbursements for teachers, nurses, and doctors. In other words, targeted measures made possible by improved fiscal space.
DEBT-TO-GDP
And here comes the most impressive part. According to the latest Economic Developments Bulletin from Alpha Bank, Greece’s debt-to-GDP ratio was 209.4% in 2020. Today, it stands at 146.1%. That’s a drop of over 63 percentage points in just five years.
Yes, really. And to put this into perspective, this is the largest and fastest reduction in debt-to-GDP ever recorded among Eurozone member states.
There’s more. Greece, along with Ireland and Cyprus, are the only countries that reduced their debt in 2024–2025, while countries like France, Italy, and Spain saw increases. In 2025 alone, the ratio dropped by 8 percentage points. This was driven by both nominal GDP growth and the early repayment of €5.3 billion from the first bailout loans of 2010.
And the trend continues. The Greek Ministry of Finance projects 136.8% in 2026 and 130.3% in 2027. If this momentum continues, Greece’s debt ratio could fall below Italy’s within the next two years.
That would be significant. It would mark the end of a twenty-year period during which Greece had the highest public debt-to-GDP ratio in the Eurozone.
And let’s not forget the primary surplus. For the third consecutive year, Greece recorded a strong primary surplus of 4.9% of GDP, equivalent to €12.1 billion, in contrast to most Eurozone countries, which are running primary deficits.