US tariffs could hit Greek economic growth by up to 0.5 percentage points, according to the worst of three scenarios worked out by the Bank of Greece.
The effects of the US government’s trade policies are likely to lead to a slowdown in Greece’s GDP growth, but the magnitude of the impact depends significantly on the intensity of disruptions to external demand and uncertainty, the Bank of Greece report stresses.
The Greek economy is projected to grow at a rate of 2.3% in 2025, 2.0% in 2026, and 2.1% in 2027, while inflation is expected to stand at 2.5%, 2.1%, and 2.4%, respectively. The risks surrounding the GDP forecast remain downside risks and are mainly related to the imposition of trade protectionist measures and rising uncertainty at the European and international level, more adverse geopolitical developments and their impact on the European economy, tightness in the labor market and possible wage pressures, as well as the occurrence of catastrophic events mainly resulting from the climate crisis.
In terms of tourism, Greece consistently ranks fourth among Mediterranean countries in terms of tourist arrivals for 2024, with the highest concentration of arrivals in the summer months compared to competing countries, despite the recent extension of the tourist season.
Travel arrivals and receipts continued to increase in 2024 (by 9.8% and 4.8% respectively), albeit at a slower pace than in 2023. Average expenditure per trip fell by 5.1% and the average length of stay of travelers was reduced, which contributed to the slowdown in the growth rate of receipts. In addition, rising inflation contributed to a reduction in travelers’ disposable income and to the restraint of travel spending. In particular, the tourism price index rose by 7.0% in 2024, exceeding the 2.7% increase recorded by the consumer price index (CPI).
With regard to tourism services, in the first quarter of 2025, non-resident arrivals and travel receipts (in nominal terms) increased by 5.4% and 4.4% respectively compared to the same period in 2024. In the period January-April 2025, foreign passenger arrivals at all airports in the country exceeded those of 2024 by 11.8%. According to Fraport Greece data, foreign passenger arrivals at regional airports in Greece increased by 5.7% in the first four months of 2025 compared to the same period in 2024, while international passenger arrivals at Athens International Airport increased by 11.0% in the period January-May 2025.
On the tourism services supply side, there was a trend towards upgrading hotel capacity in Greece in 2024, with 57% of hotel units belonging to the three highest categories.In 2024, there were 10,104 hotel units operating in Greece, with a total of 447,363 rooms and 894,854 beds. The qualitative upgrade of hotel capacity continued, mainly through a 5% increase in 5-star units compared to 2023. This trend is also reflected in the total investments in the sector, which exceeded €1.0 billion in 2024, corresponding to 9% of the total turnover of hotels. Of these investments, €200 million was directed towards sustainability measures.
Activity in the tourism sector continued its positive course in the first quarter of 2025, reinforcing expectations that the historically high levels of 2024 will be exceeded, albeit at a slower pace than in the previous year. Greece ranks fourth in the preferences of European travelers—one place higher than last year despite the general decline in demand for the European South. This decline is mainly attributed to extreme temperatures in the Mediterranean and excessive congestion during the peak summer months. For the year as a whole, the outlook for Greek tourism remains positive, despite geopolitical tensions and the geo-economic environment shaped by US trade policies.
The possible slowdown or even recession of the US economy, as a result of the negative consequences of tariff policy and the decline of the dollar against the euro, may in the short term limit the flow of American tourists to Greece. At the same time, the expected weak economic growth in the eurozone may also have a negative impact on Greek tourism. It is worth noting that over 50% of arrivals and tourism receipts in Greece come from EU-27 countries.
