Salary increases struggle to keep pace with inflation in Greece

Although the Greek economy has recorded positive growth in recent years, the benefits have not been sufficient to offset the rising cost of living. Analysts warn that hundreds of thousands of workers could receive salary increases that fall below the inflation rate through 2027, effectively reducing their real incomes.

According to Eurostat data, Greece's cumulative inflation between 2021 and 2025 stood at 21.4%, broadly in line with other southern European countries. Portugal recorded cumulative inflation of 20.5%, Spain 21.9%, while the eurozone average reached 22.6%.

However, Greece continues to lag significantly behind its European peers in disposable household income. Eurostat estimates that Greece's median equivalent disposable income in 2025 amounted to 60.8% of the European Union average, compared with 76.5% in Portugal and 98.6% in Spain.

Despite a cumulative 33.8% increase in median disposable income between 2021 and 2025, Greece's income growth remained slightly slower than Spain's 34.2% and Portugal's 35%, widening the income gap with its European counterparts.

Inflation is expected to remain a challenge in 2026, with the annual average forecast now approaching 4%, higher than the Greek government's earlier projection of 3.2%. Inflation is expected to ease in 2027, although revised forecasts are likely to exceed the previously estimated 2.4%, reflecting continued pressure from elevated prices.

Economists say wage growth will need to outpace inflation for households to experience meaningful gains in purchasing power. The issue is expected to be a key consideration as the government finalizes its annual economic support measures, commonly announced at the Thessaloniki International Fair, with a focus on assisting vulnerable households amid ongoing cost-of-living pressures.

Source:Kathimerini