Growth, investment-grade status, fiscal surpluses and credit upgrades on one side. Inflation, housing costs, private debt and stagnant purchasing power on the other. Greece’s economic debate is no longer about the numbers—it is about what those numbers actually mean.
Prime Minister Kyriakos Mitsotakis recently presented the government’s seven-year economic record as a story of recovery and transformation. The presentation focused on four central achievements: sustained economic growth, the restoration of Greece’s investment-grade credit rating, strong fiscal surpluses and a sharp reduction in public debt relative to GDP.
On paper, these achievements are difficult to dispute. International institutions, including the European Commission, the Bank of Greece and all major credit rating agencies, acknowledge that Greece has undergone one of the most remarkable fiscal recoveries in Europe.
Yet the political controversy surrounding Greece’s economy is no longer centered on macroeconomic indicators. It has shifted toward a more fundamental question:
Has economic recovery actually improved everyday life?
That question now defines the country’s political debate.
Growth: A Strong Economy That Many Households Do Not Feel
The government argues that Greece has consistently outperformed the euro area’s economic growth.
Official figures largely support this narrative.
Following the pandemic, Greece recorded:
- 2021: GDP growth of 8.7%
- 2022: 5.5%
- 2023: approximately 2.3%
- 2024: around 2.3%
- 2025: close to 2%
During the same period, average euro-area growth remained near 1%, making Greece one of Europe’s fastest-growing economies.
The government therefore argues that Greece has successfully exited the era of prolonged recession and returned to a path of sustained expansion.
The opposition’s argument
Opposition parties counter that GDP growth alone says little about living standards.
Although the economy has expanded, Greece still ranks among the lowest countries in the European Union in terms of purchasing power, according to Eurostat’s Purchasing Power Standards (PPS).
In other words, the economy has become larger, but many households do not necessarily feel wealthier.
Investment Grade: The Government’s Strongest Achievement
Perhaps no economic accomplishment better symbolizes Greece’s recovery than the restoration of investment-grade status.
After losing investment grade during the sovereign debt crisis in 2010, Greece regained it gradually:
- Scope Ratings: August 2023
- DBRS Morningstar: September 2023
- S&P Global Ratings: October 2023
- Fitch Ratings: December 2023
- Moody’s Investors Service: March 2025
Today, all major international agencies classify Greek sovereign debt as investment grade.
This milestone substantially lowered government borrowing costs while improving financing conditions for banks and corporations.
The opposition’s argument
The opposition does not dispute the significance of investment-grade status.
Instead, it argues that credit ratings primarily benefit financial markets and institutional investors, while their impact on household incomes remains indirect and gradual.
Public Debt: One of Europe’s Fastest Fiscal Improvements
Few countries have reduced their debt-to-GDP ratio as rapidly as Greece.
Public debt peaked at roughly 206% of GDP in 2020, largely because of pandemic-related spending.
By 2024, the ratio had fallen to around 154%, while estimates for 2025 place it near 146% of GDP.
The European Commission projects further declines over the coming years, provided fiscal discipline and economic growth continue.
This improvement has been one of the main reasons behind Greece’s credit upgrades.
The opposition’s argument
Critics emphasize that the nominal stock of debt remains extremely high, exceeding €360 billion.
They also argue that part of the debt ratio’s decline reflects inflation and nominal GDP growth rather than debt repayment alone.
Fiscal Surpluses: Discipline or Hidden Taxation?
Another pillar of the government’s narrative is fiscal consolidation.
Following years of deficits, Greece has returned to sizeable primary budget surpluses.
Primary surplus reached approximately:
- 4.7% of GDP in 2024
- close to 5% in 2025
The European Commission considers Greece among the strongest fiscal performers in the European Union.
The opposition’s argument
Opposition parties argue that part of this fiscal overperformance stems from inflation.
Higher consumer prices automatically generate larger VAT revenues without necessarily increasing real consumption.
In this interpretation, strong public finances have partly been financed by higher living costs.
Investment Is Rising—but Has the Economy Truly Changed?
Investment has clearly increased.
Gross fixed capital formation rose from roughly 11% of GDP before the pandemic to nearly 17% in recent years.
Much of this increase has been supported by the EU Recovery and Resilience Facility, through which Greece is receiving more than €36 billion in grants and loans.
The government argues that these investments are transforming the productive model of the economy.
The opposition’s argument
Critics point out that productivity remains below the EU average.
Imports continue to exceed exports in many sectors, while high-value manufacturing and research investment remain relatively weak.
According to this view, Greece’s economic model has improved—but has not fundamentally changed.
Employment Has Improved
Labour market indicators have strengthened significantly.
Unemployment has fallen to approximately 8%, compared with double-digit levels only a few years ago.
Employment has expanded, tourism has recovered strongly, and business confidence has improved.
The opposition’s argument
Lower unemployment has not fully translated into stronger purchasing power.
Real wage growth has been constrained by inflation, while many new jobs remain concentrated in relatively low-productivity sectors such as tourism and hospitality.
Housing Has Become the New Social Challenge
If there is one issue increasingly dominating public debate, it is housing affordability.
Property prices have risen sharply over recent years.
According to the Bank of Greece, residential prices continued increasing during 2025, following equally strong gains in previous years.
Rental prices have also climbed significantly, especially in Athens and Thessaloniki.
Government initiatives, including subsidized mortgage programs for young households, have attempted to ease pressure.
The opposition’s argument
Critics argue that housing costs have risen faster than wages.
For many younger Greeks, home ownership has become increasingly difficult despite overall economic recovery.
Private Debt Remains Greece’s Structural Weakness
Perhaps the government’s most difficult challenge lies outside public finances.
Although banks have dramatically reduced their non-performing loan ratios, much of the problem has been transferred to loan servicing companies.
Households and businesses continue facing substantial obligations toward tax authorities, social security funds and private creditors.
The banking system has become healthier.
Many borrowers, however, continue struggling with accumulated debt.
Two Narratives, One Economy
After seven years in office, the Mitsotakis government presents an economy that has regained international credibility.
Investment-grade ratings have returned.
Growth has exceeded much of Europe.
Fiscal balances have improved dramatically.
Public debt relative to GDP has fallen at one of the fastest rates in the European Union.
These achievements are real.
So are the challenges.
Purchasing power remains weak compared with the European average.
Housing affordability has deteriorated.
Private debt continues to burden households and businesses.
Many citizens feel that macroeconomic success has yet to translate into meaningful improvements in their daily lives.
The Real Political Test
Ultimately, the debate over Greece’s economy is no longer about whether recovery has occurred.
It clearly has.
The more difficult question is whether that recovery has been broadly shared.
International investors largely judge Greece by its fiscal discipline, debt dynamics and institutional credibility.
Voters judge it differently.
They evaluate the economy through wages, grocery bills, rent, mortgages and the cost of living.
That divergence explains why Greece can simultaneously receive praise from international markets while many citizens remain unconvinced that their own economic circumstances have improved proportionately.
In the end, the durability of the government’s economic success story will depend not only on GDP growth, investment-grade ratings or fiscal surpluses, but on whether a growing share of Greeks comes to believe that the country’s macroeconomic recovery has also become their own personal recovery.